Nifty ends above crucial 6,100 level on rate cut hopes

CNX Nifty rallied to a 30-month high on Wednesday on hopes that the Reserve Bank will cut rates next month after headline inflation eased to a 41-month low. India's headline wholesale inflation eased below 5 per cent in April, dropping within the central bank's comfort zone for the first time in more than three years. On the global front, Asian markets snapped Wednesday’s trade mostly in green, while, European counters recovered in early deals on short-covering.

Back home, Indian equity benchmark made a positive opening with re-capturing its crucial 6,000 level buoyed by global cues. Overnight, the US markets closed higher as Wall Street embraced the view of growing sense of optimism about a still-improving economy. In the first half, market traded in positive territory as sentiments remained optimistic after Finance Minister said that he would set up a cell in his office to monitor and resolve the issues for speedy completion of the stalled infrastructure projects. Investors’ sentiments also got a boost after RBI governor’s statement that he has noted the fall in inflation, fuelling hopes for a further rate cut in the upcoming mid quarter policy review on June 17. In the second half, market extended its gains and continued firm trade till the end on account of sustained buying in front line blue chip counters. Buying was witnessed in risk sensitive sectors such as realty, PSU bank and auto stocks. Finally, Nifty ended the session near its intra-day high level with a massive gain of 151 points.

Meanwhile, sectoral indices on the NSE made a positive closing. CNX Realty up by 4.35%, CNX PSU Bank up by 4.17%, CNX Finance up by 3.97% and CNX Auto up by 2.40% remained the top gainers in the trade. While, the India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, up by 5.59% and reached 18.13.

The India VIX witnessed an addition of 5.59% at 18.13 as compared to its previous close of at 17.17 on Tuesday. The 50-share CNX Nifty gained 151.35 points or 2.52% to settle at 6,146.75.

Nifty May 2013 futures closed at 6161.50 on Wednesday at a premium of 14.75 points over spot closing of 6146.75, while Nifty June 2013 futures ended at 6166.75, at a premium of 20.00 points over spot closing. Nifty May futures saw an addition of 2.54 million (mn) units taking the total outstanding open interest (OI) to 25.09 mn units. The near month May 2013 derivatives contract will expire on May 30, 2013.

From the most active contracts, DLF May 2013 futures were trading at a premium of 1.40 points at 242.65 compared with spot closing of 241.25. The number of contracts traded was 25,127.

Tata Motors May 2013 futures were trading at a premium of 2.45 points at 308.95 compared with spot closing of 306.50. The number of contracts traded was 14,786.

Karnataka Bank May 2013 futures were trading at a premium of 0.90 points at 160.80 compared with spot closing of 159.90. The number of contracts traded was 14,029.

Reliance Industries May 2013 futures were at a premium of 4.25 points at 822.45 compared with spot closing of 818.20. The number of contracts traded was 19,815. 

ICICI Bank May 2013 futures were at a discount of 13.00 points at 1177.80 compared with spot closing of 1190.80. The number of contracts traded was 19,320.

Among Nifty calls, 6,200 SP from the May month expiry was the most active call with contraction of 0.41 million open interest.

Among Nifty puts, 6,000 SP from the May month expiry was the most active put with an addition of 1.35 million open interest.

The maximum OI outstanding for Calls was at 6,200 SP (6.86 mn) and that for Puts was at 6,000 SP (7.33 mn).

The respective Support and Resistance levels are: Resistance 6196.28 -- Pivot Point 6107.57 -- Support 6058.03.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.41 for May-month contract.

The top five scrips with highest PCR on OI were Kotak Bank 2.17, Siemens 2.12, Bharti Airtel 1.02, Ranbaxy 1.63 and Tata Motors 1.45.

Among most active underlying, Unitech witnessed an addition of 2.94 million of Open Interest in the May month futures contract followed by Rcom which witnessed contraction of 1.31 million of Open Interest in the near month contract. Meanwhile, Jaiprakash Associates witnessed contraction of 0.74 million in the May month futures. Also, IFCI witnessed contraction of 3.32 million in Open Interest in the May month contract. Finally, GMR Infrastructure witnessed an addition of 0.02 million of Open Interest in the near month futures contract.