Nifty ends above the crucial 5,800 level on rate-cut hopes

CNX Nifty ended higher for a second straight day on Monday amid buying in all major pockets of the market except IT. Institutional investors continued with dollar inflows on hopes that central bank will cut its key interest rates next month with a recent fall in inflation and commodity prices. On global front, positive cues from Asian and European peers also provided support to the Nifty. Most of the Asian markets made a positive closing, boosted by the fact that the Group of 20 (G20) appeared to endorse Japan's stimulus plans. Moreover, European markets too opened higher on Monday.

Back home, India equity benchmark made a flat start and firmed up instantly buoyed by firm global cues as the US markets closed higher on Friday. In the first half, market traded in green amid buying in rate sensitive stocks on hopes of a pick-up in economic activity, with a possible interest rate cut next month. Moreover, recent drop in gold and global oil prices has boosted the market sentiment as it eased worries of high current account deficit (CAD) and fiscal deficit. Market continued its firm trade till the end of session on the back of continued buying activity by funds and retail investors and taking cues from European counterparts. Buying was witnessed in all major indices of the market except IT. Finally, Nifty ended the session near its intra-day high level with the massive gain of 51 points.  

Meanwhile, the sectoral indices on the NSE made a positive closing despite IT. CNX Realty up by 3.65%, CNX Media up by 2.74%, CNX Metal up by 2.23%, CNX Finance up by 2.05% and CNX PSU Bank up by 1.91% remained the top gainers in the trade. While, CNX IT down 1.83%   remained the only loser in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, up by 5.59% and reached 16.22.

   The India VIX witnessed an addition of 5.59% at 16.22 as compared to its previous close of at 15.36 on Thursday.

The 50-share CNX Nifty gained 51.30 points or 0.89% to settle at 5,834.40.

Nifty April 2013 futures closed at 5832.85 on Monday at a discount of 1.55 points over spot closing of 5834.40, while Nifty May 2013 futures ended at 5848.15, at a premium of 13.75 points over spot closing. Nifty April futures saw contraction of 3.33 million (mn) units taking the total outstanding open interest (OI) to 14.25 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 0.45 points at 97.90 compared with spot closing of 97.45. The number of contracts traded was 38,486.

BHEL May 2013 futures were trading at a discount of 1.75 points at 189.55 compared with spot closing of 191.30. The number of contracts traded was 18,279.

BHEL April 2013 futures were trading at a premium of 0.10 points at 191.40 compared with spot closing of 191.30. The number of contracts traded was 25,595.

DLF April 2013 futures were at a premium of 1.15 points at 252.35 compared with spot closing of 251.20. The number of contracts traded was 23,960. 

ICICI Bank April 2013 futures were at a discount of 9.40 points at 1147.40 compared with spot closing of 1156.80. The number of contracts traded was 19,004.

Among Nifty calls, 5,900 SP from the April month expiry was the most active call with an addition of 0.53 million open interest.

Among Nifty puts, 5,600 SP from the April month expiry was the most active put with contraction of 1.33 million open interest.

The maximum OI outstanding for Calls was at 5900 SP (7.66 mn) and that for Puts was at 5,600 SP (9.73 mn).

The respective Support and Resistance levels are: Resistance 5856.23 -- Pivot Point 5823.02 -- Support 5801.18.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.45 for April -month contract.

The top five scrips with highest PCR on OI were Auro Pharma 2.45, Bharti Airtel 2.29, HDFC Bank 2.21, Col Pal 2.00, and Maruti 1.98.

Among most active underlying, RCOM witnessed contraction of 6.20 million of Open Interest in the April month futures contract followed by Unitech which witnessed contraction of 9.93 million of Open Interest in the near month contract. Meanwhile, Jaiprakash Associates witnessed contraction of 9.19 million in the April month futures. Also, IFCI witnessed contraction of 8.60 million in Open Interest in the April month contract. Finally, Reliance Power witnessed contraction of 5.27 million of Open Interest in the near month futures contract.