Nifty ends above 5,550 level on rate cut hopes

CNX Nifty, recovering from steep fall in the previous session, ended higher on Monday after lower-than-expected WPI inflation number and faltering crude and gold prices cemented hopes that the central bank would cut interest rates in its next monetary policy scheduled on May 3. After the moderate rise in February, inflation based on the wholesale price index (WPI) fell to 5.96% in March 2013 -  the lowest recorded figure in 40-month. On the global front, Asian markets shut shop in the negative terrain as weaker-than-expected US and Chinese data raised concerns about the global economic outlook while, most of the European counters made negative opening on Monday. 

Back home, pressurized by feeble global cues, Indian equity benchmark made a negative start as the US markets ended flat with a negative bias on Friday on getting a slew of disappointing economic reports. However, in the late morning session market pared its early losses and turned positive on the back of positive inflation number. Market continued its positive trade and crossed its crucial 5,550 level on account of buying in frontline counters. The recent drop in gold and crude oil prices also added to positive sentiments as both constitute major portions in the country’s total import. Shares of oil marketing companies moved higher on hopes that decline in crude prices would lower the cost of under-recoveries. Buying was witnessed in PSU bank, energy and PSE stocks. Finally, Nifty ended the session with a gain of 39 points. 

Meanwhile, sectoral indices on the NSE made a positive closing. CNX PSU Bank up by 3.10%, CNX Energy up by 1.74%, CNX PSE up by 1.28%, CNX FMCG up by 1.23% and CNX Finance up by 0.80% remained the top gainers in the trade. While, CNX Metal down 1.00%, CNX Auto down 0.90%, CNX Pharma down 0.83% and CNX IT down 0.19% remained the losers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, up by 0.97% and reached 16.61.

The India VIX witnessed an addition of 0.97% at 16.61 as compared to its previous close of at 16.45 on Friday.

The 50-share CNX Nifty gained 39.85 points or 0.72% to settle at 5,568.40.

Nifty April 2013 futures closed at 5,568.05 on Monday at a discount of 0.35 points over spot closing of 5,568.40, while Nifty May 2013 futures ended at 5,588.10, at a premium of 19.70 points over spot closing. Nifty April futures saw an addition of 1.21 million (mn) units taking the total outstanding open interest (OI) to 21.45 mn units. The near month April 2013 derivatives contract will expire on April 25, 2013.

From the most active contracts, JP Associates April 2013 futures were trading at a premium of 0.70 points at 72.55 compared with spot closing of 71.85. The number of contracts traded was 15,010.

DLF April 2013 futures were trading at a premium of 0.85 points at 242.00 compared with spot closing of 241.15. The number of contracts traded was 18,145.

ICICI Bank April 2013 futures were trading at a premium of 5.50 points at 1050.50 compared with spot closing of 1045.00. The number of contracts traded was 20,556.

Reliance Industries April 2013 futures were at a discount of 1.35 points at 792.85 compared with spot closing of 794.20. The number of contracts traded was 20,266. 

Reliance Capital April 2013 futures were at a premium of 1.45 points at 331.10 compared with spot closing of 329.65. The number of contracts traded was 13,060.

Among Nifty calls, 5,700 SP from the April month expiry was the most active call with an addition of 0.40 million open interest.

Among Nifty puts, 5,500 SP from the April month expiry was the most active put with an addition of 1.71 million open interest.

The maximum OI outstanding for Calls was at 5700 SP (8.43 mn) and that for Puts was at 5,500 SP (8.31mn).

The respective Support and Resistance levels are: Resistance 5607.4 -- Pivot Point 5553.85 -- Support 5514.85.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.87 for April -month contract.

The top five scrips with highest PCR on OI were Aurobindo Pharma 1.83, HDFC Bank 1.83, Maruti 1.48, Sun Pharma 1.32 and Bharti Airtel 1.19.

Among most active underlying, JP Associates witnessed contraction of 0.004million of Open Interest in the April month futures contract followed by Unitech which witnessed contraction of 1.58 million of Open Interest in the near month contract. Meanwhile, IFCI witnessed contraction of 0.61million in the April month futures. Also, Rcom witnessed an addition of 0.53 million in Open Interest in the April month contract. Finally, R power Industries witnessed contraction of 0.42 million of Open Interest in the near month futures contract.