Nifty ends above crucial 5,900 mark amid rate-cut hopes

CNX Nifty snapped the three days losing streak to end 1 percent higher on Thursday despite headline inflation rising at a faster-than-expected pace in February. Wholesale price index rose at 6.84 per cent in February against an annual rise of 6.62 per cent in January, but traders focused on the core inflation data, which slipped below the 4 per cent mark, for the first time in many months. On the global front, Asian market made a mixed closing on Thursday, while, European stock markets opened mostly higher supporting the rally in Indian stocks.

Back home, Indian equity benchmark made a flat start as market participants remained sideways awaiting WPI inflation data. In the first half, market traded in red as investor sentiments were weighed down by reports of online newspaper Cobrapost that three public sector lenders including Axis Bank, HDFC Bank and ICICI Bank allegedly indulged in money laundering activities, leading to downfall in banking stocks. However, in the second half, market turned positive after the release of WPI-based inflation data as core inflation in February fell below 4-percent mark for the first time in nearly 3-year fuelling hopes of rate-cut by the central bank on March 19. Meanwhile, the headline inflation number stood at 6.84% much lower than 7.56% recorded during February last year. In the late after-noon session, market extended its gain and crossed its crucial 5,900 level on account of buying in all major indices amid rate cut hopes. Banking shares also spiked up after different banks, reacting to the sting Cobrapost report, said that they conduct business with the highest level of compliance to legal and regulatory requirements. Finally, Nifty ended the session with a gain of 57 points.

Meanwhile, all of the sectoral indices on the NSE made a positive closing. CNX PSU Bank up by 2.66%, CNX Realty and Media both up by 2.04% and CNX Finance up by 1.78% remained the top gainers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down by 9.51% and reached 14.66. 

The India VIX witnessed an addition of 9.51% at14.66 as compared to its previous close of at 16.20 on Wednesday.

The 50-share CNX Nifty gained 57.75 points or 0.99% to settle at 5,908.95.

Nifty March 2013 futures closed at 5,939.75 on Thursday at a premium of 30.80 points over spot closing of 5,908.95, while Nifty April 2013 futures ended at 5,973.60, at a premium of 64.65 points over spot closing. Nifty March futures saw contraction of 0.41 million (mn) units taking the total outstanding open interest (OI) to 15.04 mn units. The near month March 2013 derivatives contract will expire on March 28, 2013.

From the most active contracts, JP Associates March 2013 futures were trading at a premium of 0.55 points at 76.95 compared with spot closing of 76.40. The number of contracts traded was 11,422.

Reliance Communications March 2013 futures were trading at a premium of 0.50 points at 68.65 compared with spot closing of 68.15. The number of contracts traded was 11,447.

Tata Motors March 2013 futures were trading at a premium of 1.05 points at 302.85 compared with spot closing of 301.80. The number of contracts traded was 17,565.

DLF March 2013 futures were at a premium of 1.55 points at 286.55 compared with spot closing of 285.00. The number of contracts traded was 15,463.

HDFC Bank March 2013 futures were at a premium of 1.00 points at 652.45 compared with spot closing of 651.45. The number of contracts traded was 21,464.

 Among Nifty calls, 6,000 SP from the March month expiry was the most active call with contraction of 0.16 million open interest.

Among Nifty puts, 5,700 SP from the March month expiry was the most active put with contraction of 2.24 million open interest.

The maximum OI outstanding for Calls was at 6000 SP (7.26 mn) and that for Puts was at 5,700 SP (10.84 mn).

The respective Support and Resistance levels are: Resistance 5955.48-- Pivot Point 5873.62-- Support 5827.08.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.47 for March -month contract.

The top five scrips with highest PCR on OI were Colpal 4.00, Divislab 2.71, HDFC Bank 2.35, TCS 1.88 and ICICI Bank 1.35. 

Among most active underlying, Unitech witnessed an addition of 2.45 million of Open Interest in the March month futures contract followed by Jaiprakash Associates which witnessed an addition of 0.81 million of Open Interest in the near month contract. Meanwhile, IFCI witnessed of contraction of 2.68 million in the March month futures. Also, RCOM witnessed an addition of 1.16 million in Open Interest in the March month contract. Finally, Hindalco witnessed an addition of 2.23 million of Open Interest in the near month futures contract.