Nifty closes above 6000 mark as banking stocks rally

Nifty surged in late trade hitting its highest level in almost seven weeks and closed above 6000 following a sharp pull-back rally in beaten down banking stocks on the back of short-coverings and bargain buying. Sentiments got a boost with comments from Federal Reserve Chairman Ben Bernanke's testimony to Congress that central bank has no plans of pulling back its stimulus measures anytime soon. Besides, the chairman also played down the unemployment rate as a factor in the central bank's decision whether to cut its bond-buying program. Gains in European stocks aided the gains on the index. Meanwhile, sentiments across the globe remained up-beat after US Federal Reserve chairman Ben Bernanke suggested stimulus policies may continue for longer than expected. Asian equity markets exhibited a mixed trend in Thursday’s session and the Japanese Nikkei rose to an eight-week high.

Nifty edged higher and hit the psychological 6,000 mark in early trade along with most of the Asian stocks. However, Index dipped to their intraday low level in noon deals, just managing to hold in green terrain, as market-participants, shunning the early optimism, resorted to profit-booking on account of Rupee’s weakness. Increased demand of dollar from importers amidst greenback’s strength in overseas market also weighed on the local unit, overriding the central bank’s attempt to stamp down on speculation. Nevertheless a sharp up-move in last leg of trade helped the index to end near intraday high, garnering gain of about a percentage point as recovery in European markets after a cautious start supported the sentiments. Rally in oil and gas counter too supported the sentiments after the Union Petroleum and Natural Gas Minister Veerappa Moily emphasized the need for greater investment in the oil and gas sector and has said that the government is committed to deal with the energy security issues.

Meanwhile, sectoral indices on the NSE made a positive closing. CNX Realty up by 2.98%, CNX PSU Bank up by 2.00%, CNX Bank Nifty up by 1.97%, CNX Finance up by 1.65% and CNX Infra up by 1.52% remained the top gainers in the trade. While, there was no loser in the trade

The India VIX witnessed contraction of 5.63 % at 18.27 as compared to its previous close of 19.36 on Wednesday. The 50-share CNX Nifty gained 64.75 points or 1.08% to settle at 6,038.05.

Nifty July 2013 futures closed at 6052.40 on Thursday at a premium of 14.35 points over spot closing of 6,038.05, while Nifty August 2013 futures ended at 6085.35 at a premium of 47.30 points over spot closing. Nifty July futures saw contraction of 0.27 million (mn) units taking the total outstanding open interest (OI) to 16.19 mn units. The near month July 2013 derivatives contract will expire on July 25, 2013.

From the most active contracts, Yes Bank July 2013 futures last traded at a premium of 1.80 points at 442.25 compared with spot closing of 440.45. The number of contracts traded was 21,861.

HUL July 2013 futures last traded at a premium of 3.80 points at 691.30 compared with spot closing of 687.50. The number of contracts traded was 46,728.

HDFC Bank July 2013 futures last traded at a premium of 1.30 points at 683.80 compared with spot closing of 682.50. The number of contracts traded was 14,238.

ICICI Bank July 2013 futures were at a premium of 3.75 points at 987.70 compared with spot closing of 983.95. The number of contracts traded was 32,954. 

Reliance Industries July 2013 futures were at a premium of 3.65 points at 919.95 compared with spot closing of 916.30. The number of contracts traded was 15,291. 

Among Nifty calls, 6,000 SP from the July month expiry was the most active call with contraction of 0.88 million open interest.

Among Nifty puts, 5,800 SP from the July month expiry was the most active put with contraction of 0.42 million open interest.

The maximum OI outstanding for Calls was at 6,000 SP (6.11 mn) and that for Puts was at 5,800 SP (9.07 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6067.92 -- Pivot Point 6021.23 -- Support-- 5991.37.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.78 for July-month contract. The top five scrips with highest PCR on OI were Sesa Goa 2.08, Ambuja Cement 1.83, HUL 1.78, Bharat Forg 1.67 and Sun Pharma 1.67.

Among most active underlying, Unitech witnessed contraction of 0.60 million of Open Interest in the July month futures contract followed by Jaiprakash Associates which witnessed an addition of 2.95 million of Open Interest in the near month contract, Reliance Communication witnessed an addition of 2.50 million in the July month futures. Also, Reliance Power witnessed an addition of 1.91 million in Open Interest in the July month contract and Tata Steel witnessed an addition of 0.10 million of Open Interest in the near month futures contract.