Nifty ends higher after FinMin’s clarification on TRC

CNX Nifty ended higher on Friday amid volatile trade. After a major sell-off seen on Budget day, the market managed to pullback today mainly in dying hours of trade, led by gains in media and auto stocks after the finance ministry issued clarification on Tax Residency Certificate (TRC). On global front, the Asian equity indices ended the session in red with sentiment burdened by worries over the economic fallout. Weak manufacturing data from China also dampened the sentiments. Moreover, European counters traded lower in the early trade as sentiments got undermined by the looming budget cuts in the United States and Italy’s political stalemate.

Back home, Indian equity benchmark made a flat to positive start on the back of buying in some selected stocks. In the first half, market traded in positive territory on the emergence of buying by funds in selected stocks and covering-up of short positions by speculators, which helped trading sentiments to improve but a weak trend in overseas markets restricted the gains. After a positive start and subsequent retreat, Indian equity market managed to hold gains in the second half too on the back of better-than-expected manufacturing activity in India. HSBC Manufacturing PMI rose to a seasonally adjusted annual rate of 54.2, from 53.2 in the preceding month. Supportive cues also came from the finance ministry after its clarification that it would not question the validity of tax residency certificates (TRCs) held by foreign investors. Traders were seen piling position in all major indices except realty. Finally, Nifty ended the session with a gain of 26 points.     

Meanwhile, most of the sectoral indices on the NSE made a positive closing. CNX Media up by 1.90%, CNX Auto up by 1.28%, CNX Metal up by 0.78% and CNX Infra up by 0.75% remained the top gainers in the trade while, CNX Realty down by 4.02% remained the only loser in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down by 5.38% and reached 14.06.

At the first day of the current month March options series the OIPCR stood at 1.01 resembling a calm nerved steady market sentiment.

The most active puts were the 5600 and 5700, where they added 957,600 and 567,700 shares respectively taking their tally of Open Interest to 4,850,000 and 6,728,450 respectively.

The most active calls were the 5700, 5800, 5900 and 6000 and added 990,600, 326,600, 758,450 and 563,800 shares respectively taking their tally of Open interest to 2,549,350, 4,022,600, 5,255,300 and 5,914,500, respectively.

As the market makers have taken up large positions in the 5900 and 6000 call series and 5600 and 5700 put series of the current month, expect the markets to be range bound between 5700 to 5900 Nifty.

The India VIX witnessed contraction of 5.38 % at 14.06 as compared to its previous close of at 14.86 on Thursday.

The 50-share CNX Nifty gained 26.65 points or 0.47% to settle at 5,719.70.

Nifty March 2013 futures closed at 5729.95 on Friday at a premium of 10.25 points over spot closing of 5,719.70, while Nifty April 2013 futures ended at 5760.55, at a premium of 40.85 points over spot closing. Nifty March futures saw an addition of 1.30 million (mn) units taking the total outstanding open interest (OI) to 15.31 mn units. The near month March 2013 derivatives contract will expire on March 28, 2013.

From the most active contracts, NHPC March 2013 futures were trading at a premium of 2.85 points at 25.85 compared with spot closing of 23.00. The number of contracts traded was 11,754.

Tata Motors March 2013 futures were trading at a discount of 2.20 points at 289.30 compared with spot closing of 291.50. The number of contracts traded was 13,846.

DLF March 2013 futures were trading at a premium of 0.25 points at 261.05 compared with spot closing of 260.80. The number of contracts traded was 26,293.

Reliance Industries March 2013 futures were at a premium of 4.50 points at 812.70 compared with spot closing of 808.20. The number of contracts traded was 19,338.

United Spirits March 2013 futures were at a premium of 17.95 points at 1,892.05 compared with spot closing of 1,874.10. The number of contracts traded was 14,454.

Among Nifty calls, 6,000 SP from the March month expiry was the most active call with an addition of 0.50 million open interest.

Among Nifty puts, 5,700 SP from the March month expiry was the most active put with an addition of 0.56 million open interest.

The maximum OI outstanding for Calls was at 6000 SP (5.85 mn) and that for Puts was at 5,700 SP (6.72 mn).

The respective Support and Resistance levels are: Resistance 5746.13-- Pivot Point 5713.02 -- Support 5686.58.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.99 for March -month contract.

The top five scrips with highest PCR on OI were Kotak Bank 4.43, Adani Ports 1.90, Punjlloyd 1.43, TCS 1.42, and Bajaj-Auto 1.39.

Among most active underlying, NHPC witnessed an addition of 10.70 million of Open Interest in the March month futures contract followed by IFCI which witnessed an addition of 2.48 million of Open Interest in the near month contract. Meanwhile, Unitech witnessed of an addition of 1.75 million in the March month futures. Also, Jaiprakash Associates witnessed an addition of 0.92 million in Open Interest in the March month contract. Finally, RCOM witnessed an addition of 0.54 million of Open Interest in the near month futures contract.