Nifty ends above 5,800 level amid strong inflation data, global cues

CNX Nifty snapping the losing streak, closed around 2 percent higher on Friday amid firm global cues, led by risk sensitive stocks after wholesale price inflation (WPI) in May remained within RBI's comfort zone for the second straight month, raising hopes of a further policy rate cut by the central bank in its next policy meet on June 17. The annual rate of inflation, based on monthly WPI, slowed down further to 4.70% (Provisional) for the month of May, 2013 as compared to 4.89% (Provisional) for the previous month and 7.55% reported in the corresponding month of the previous year. On the global front, Asian markets too shut shop mostly in positive terrain with Japanese Nikkei surging by about two percent. Meanwhile, European markets made a positive opening in early deals on Friday.

Back home, Indian equity benchmark made a gap-up opening, buoyed by firm global cues as the US markets bounced back in last session on getting some better than expected economic data. In the first half, market traded in green as investor sentiment got a boost on the back of strong WPI data for May. Some support also came in with finance minister P Chidambaram’s statement that the government is soon expected to decide on various key measures to speed up the process of economic reforms and spur investments. Chief Economic Advisor Raghuram Rajan’s statement that the country’s current account deficit (CAD) is likely to be around 4 percent of the gross domestic product (GDP) for the fourth quarter of FY13, also added to the optimistic sentiments. In the second half, market extended its early gains and continued positive trade till the end of session on account of buying in frontline blue chip counters and taking cues from European counterparts. Buying was witnessed in all major indices of the market. Finally, Nifty ended the session near its intra-day high level with a massive gain of 109 points.

Meanwhile, sectoral indices on the NSE made a positive closing. CNX Auto up by 2.80%, CNX Metal up by 2.63%, CNX Realty and Finance both up by 2.37% and CNX Infra up by 2.36% remained the top gainers in the trade. While, the India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down by 5.61% and reached 18.35.

The India VIX witnessed contraction of 5.61% at 18.35 as compared to its previous close of at 19.44 on Thursday. The 50-share CNX Nifty gained 109.30 points or 1.92% to settle at 5,808.40.

Nifty June 2013 futures closed at 5805.95 on Friday at a discount of 2.45 points over spot closing of 5808.40, while Nifty July 2013 futures ended at 5823.80, at a premium of 15.40 points over spot closing. Nifty June futures saw contraction of 0.15 million (mn) units taking the total outstanding open interest (OI) to 15.64 mn units. The near month June 2013 derivatives contract will expire on June 27, 2013.

From the most active contracts, Tata Motors June 2013 futures were trading at a premium of 0.40 points at 296.90 compared with spot closing of 296.50. The number of contracts traded was 12,390.

Tata Steel June 2013 futures were at a premium of 1.60 points at 275.40 compared with spot closing of 273.80. The number of contracts traded was 11,385. 

Apollo Tyre June 2013 futures were at a premium of 0.45 points at 65.10 compared with spot closing of 64.65. The number of contracts traded was 15,594. 

Reliance Industries June 2013 futures were trading at a discount of 0.70 points at 815.85 compared with spot closing of 816.55. The number of contracts traded was 21,121.

United Spirits June 2013 futures were trading at a discount of 4.45 points at 2385.10 compared with spot closing of 2389.55. The number of contracts traded was 18,542.

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

Among Nifty puts, 5,700 SP from the June month expiry was the most active put with an addition of 0.53 million open interest.

The maximum OI outstanding for Calls was at 6,000 SP (7.56 mn) and that for Puts was at 5,700 SP (7.56 mn).

The respective Support and Resistance levels are: Resistance 5838.73 -- Pivot Point 5789.07 -- Support 5758.73.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.93 for June -month contract.

The top five scrips with highest PCR on OI were DR Reddy 1.40, CESC 1.29, Dabur 1.24 , Exide Ind 1.11, and Hindalco 1.02.

Among most active underlying, Unitech witnessed contraction of 0.54 million of Open Interest in the June month futures contract followed by JP Associates which witnessed contraction of 1.58 million of Open Interest in the near month contract. Meanwhile, Reliance Communications witnessed contraction of 1.00 million in the June month futures. Also, Shree Renuka Sugars witnessed an addition of 1.42 million in Open Interest in the June month contract. Finally, R Power witnessed contraction of 0.07 million of Open Interest in the near month futures contract.