Nifty ends above crucial 5,650 mark on rate cut hopes

CNX Nifty ended higher on Tuesday amid rising hopes of rate cut following a sharp slowdown in headline inflation. The wholesale price index (WPI) fell to 5.96% in March 2013 -  the lowest recorded figure in 40-month, which is much lower than the Reserve Bank of India (RBI)'s projection of 6.8%. Further, the steep slump in gold and crude oil prices, which if continued, would help to ease concerns of high current account and fiscal deficit also boosted the sentiment. On the global front, Asian markets made a mixed closing. Meanwhile, European shares were trading down mirroring a sharp sell-off in US stocks and commodity prices as mounting worries over the pace of global growth rattled investors.

Back home, Indian equity benchmark made a positive start on the back of buying in rate sensitive stocks on hopes that the RBI will cut its interest rate on May 3 policy review. In first half, market extended its gains as the sentiments got a boost after Planning Commission Deputy Chairman Montek Singh Ahluwalia exuded confidence that the price situation would improve further in the coming months. Market continued its firm trade on account of sustained buying activity by funds and retail investors despite mixed global cues. In the late afternoon session, market crossed its crucial 5,650 level on the back of buying in rate sensitive stocks like finance, realty, PSU bank and infra stocks. Finally, Nifty ended the session near its intra-day high level with a massive gain of 120 points. 

Meanwhile, most of the sectoral indices on the NSE made a positive closing. CNX Finance up by 3.15% CNX Infra up by 2.68%, CNX Realty up by 2.53%, CNX Auto up by 2.46% and CNX PSE up by 2.27% remained the top gainers in the trade. While CNX Media down 0.78% and CNX IT down 0.66% remained the losers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down by 2.17% and reached 16.25.

The India VIX witnessed contraction of 2.17% at 16.25 as compared to its previous close of at 16.61 on F Monday.

The 50-share CNX Nifty gained 120.55 points or 2.16% to settle at 5,688.95.

Nifty April 2013 futures closed at 5,696.35 on Tuesday at a premium of 7.40 points over spot closing of 5,688.95, while Nifty May 2013 futures ended at 5,713.65, at a premium of 24.70 points over spot closing. Nifty April futures saw contraction of 1.63 million (mn) units taking the total outstanding open interest (OI) to 19.82 mn units. The near month April 2013 derivatives contract will expire on April 25, 2013.

From the most active contracts, Reliance Communications April 2013 futures were trading at a premium of 0.15 points at 83.15 compared with spot closing of 83.00. The number of contracts traded was 19,080.

DLF April 2013 futures were trading at a premium of 1.30 points at 245.50 compared with spot closing of 244.20. The number of contracts traded was 18,599.

Reliance Industries April 2013 futures were trading at a premium of 2.50 points at 804.45 compared with spot closing of 801.95. The number of contracts traded was 27,151.

ICICI Bank April 2013 futures were at a premium of 6.25 points at 1078.55 compared with spot closing of 1072.30. The number of contracts traded was 20,079. 

United Spirits April 2013 futures were at a premium of 6.85 points at 2033.40 compared with spot closing of 2026.55. The number of contracts traded was 14,893.

Among Nifty calls, 5,700 SP from the April month expiry was the most active call with contraction of 0.57 million open interest.

Among Nifty puts, 5,600 SP from the April month expiry was the most active put with an addition of 2.75 million open interest.

The maximum OI outstanding for Calls was at 5700 SP (7.86 mn) and that for Puts was at 5,600 SP (8.71mn).

The respective Support and Resistance levels are: Resistance 5740.18 -- Pivot Point 5648.02 -- Support 5596.78.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.05 for April -month contract.

The top five scrips with highest PCR on OI were Col Pal 2.00, Auro Pharma 1.93, HDFC Bank 1.90, Maruti 1.76, and Sun Pharma 1.57.

Among most active underlying, JP Associates witnessed contraction of 0.26 million of Open Interest in the April month futures contract followed by Unitech which witnessed addition of 2.21 million of Open Interest in the near month contract. Meanwhile, IFCI witnessed an addition of 0.76 million in the April month futures. Also, Rcom witnessed an addition of 0.73 million in Open Interest in the April month contract. Finally, R power Industries witnessed contraction of 0.38 million of Open Interest in the near month futures contract.