Nifty closes above 5950 on bargain buying

Nifty was volatile and pulled back from day's low in the last hour of trade and closed above 5950, shrugging off earlier gains, a day after the government announced to hike foreign direct investment (FDI) cap in a dozen sectors, including 100 per cent cap in telecom and higher caps in insurance and defence sectors, to boost the sagging economy. Better earnings by companies like Infosys and HDFC Bank for the first quarter further supported the uptrend. A firming trend in the Asian region ahead of the Federal Reserve Chairman Ben S Bernanke's address to the US Congress further influenced the sentiment.

On the global front, while Asia-pacific shares mostly ended in green on expectations that Federal Reserve Chairman Ben Bernanke will reiterate later in the day that US monetary policy is to stay accommodative, European shares adopted a cautious approach ahead of Bernanke’s testimony that would provide clarity on when the US central bank bond-buying programme would kick start.

Nifty started on a positive note and headed towards the 6,000 level as the government's decision to allow foreign direct investment in almost a dozen sectors, including telecom and the tightly-policed defence, boosted sentiments. Further, the index extended intraday gains and was near the day's high in the late morning trade. Index failed to hold on to intraday gains and slipped in the negative territory after finance minister P Chidambaram said that the Revenue Department will target 12 lakh service tax assessees who have stopped filing returns. Weak European markets also hurt sentiment. However, index returned to the green zone supported by good numbers from the private sector banking major HDFC Bank, which posted 30% increase year-on-year in its net profit at Rs 1843 crore for the first quarter of the current financial year. Though, its net nonperforming loans as a percentage of total assets increased to 0.3% compared with 0.2% a year ago and weighed on the stocks, taking it lower by over 2 percent. Meanwhile, spurt in FMCG major HUL which surged to its fresh lifetime high and ITC along with other FMCG majors, helped the markets to recover in late trade 

Meanwhile, sectoral indices on the NSE made a positive closing. CNX MNC up by 4.07%, CNX FMCG up by 3.48%, CNX Consumption up by 1.22%, CNX Energy up by 0.97% and CNX IT up by 0.88% remained the top gainers in the trade. While, CNX PSU BANK down by 2.09%, CNX Metal down by 1.95%, CNX Auto down 0.80%, CNX Infra down 0.43% and CNX realty 0.30% were the loser in the trade

The India VIX witnessed an addition of 1.95 % at 19.36 as compared to its previous close of 18.99 on Tuesday. The 50-share CNX Nifty gained 18.05 points or 0.30 % to settle at 5,973.30.

Nifty July 2013 futures closed at 5970.85 on Wednesday at a discount of 2.45 points over spot closing of 5,973.30, while Nifty August 2013 futures ended at 5998.95 at a premium of 25.65 points over spot closing. Nifty July futures saw contraction of 0.11 million (mn) units taking the total outstanding open interest (OI) to 16.46 mn units. The near month July 2013 derivatives contract will expire on July 25, 2013.

From the most active contracts, Reliance Communications July 2013 futures last traded at a discount of 0.35 points at 142.55 compared with spot closing of 142.90. The number of contracts traded was 16,655.

HUL July 2013 futures last traded at a premium of 5.70 points at 685.70 compared with spot closing of 680.00. The number of contracts traded was 60,784.

Yes Bank July 2013 futures last traded at a premium of 4.30 points at 428.30 compared with spot closing of 424.00. The number of contracts traded was 24,910.

HDFC Bank July 2013 futures were at a premium of 2.55 points at 662.60 compared with spot closing of 660.05. The number of contracts traded was 20,476. 

Reliance Capital July 2013 futures were at a premium of 3.25 points at 363.90 compared with spot closing of 360.65. The number of contracts traded was 15,602.  Among Nifty calls, 6,000 SP from the July month expiry was the most active call with an addition of 0.50 million open interest.

Among Nifty puts, 5,800 SP from the July month expiry was the most active put with an addition of 0.31 million open interest.

The maximum OI outstanding for Calls was at 6,000 SP (6.99 mn) and that for Puts was at 5,800 SP (9.50 mn).

The respective Support and Resistance levels of Nifty are: Resistance 5999.82 -- Pivot Point 5963.28 -- Support-- 5936.77.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.59 for July-month contract. The top five scrips with highest PCR on OI were Sesa Goa 2.34, Sun Pharma 1.76, HUL 1.70, Ambuja Cement 1.62 and ITC 1.59.

Among most active underlying, Unitech witnessed contraction of 1.61 million of Open Interest in the July month futures contract followed by Jaiprakash Associates which witnessed contraction of 2.67 million of Open Interest in the near month contract, Reliance Communication witnessed contraction of 2.01 million in the July month futures. Also, Reliance Power witnessed contraction of 3.11 million in Open Interest in the July month contract and HDIL witnessed contraction of 0.80 million of Open Interest in the near month futures contract.