Nifty wipes out initial losses to end above 5700 mark

Nifty recouped losses in last hour of trade and closed above 5700 mark due to fresh buying by funds as the government announced steps to revive the investment climate in the economy. Rupee plunged to 61 per dollar before trading at 60.88 when the stock market was closing, after Finance Minister P Chidambaram said government will take measures to attract long term NRI funds. Global markets were keenly awaiting US GDP data release and a policy statement following Fed's 2-day meet later today. The weakness continued for the sixth consecutive session on rupee depreciation, asset quality concerns of banks, slower sales growth of FMCG companies and cut in FY14 GDP forecast by the RBI. Bank Nifty bearing the maximum brunt after the Reserve Bank of India turned unexpectedly dovish in the monetary policy review yesterday which made the rupee slide below the 61 against the dollar.

On the global front, while most of the Asian pacific shares ended in red, European markets were trading on a mixed note as investors focused on events due, later in the day. Besides conclusion of the Federal Reserve's policy meeting, investors were awaiting release of US GDP data that will be scrutinized for its potential impact on the Fed's monetary policy stance.

Index slumped in early trade as a further slide in rupee against the dollar rattled investor sentiment and extended initial losses to hit fresh intraday low in morning trade. A bout of volatility was witnessed as indices trimmed losses after hitting fresh intraday lows in noon trade.  Index got solid support in afternoon trade as Finance Minister P. Chidambaram exuded confidence that the economy would record a growth rate of 5.5 to 6 per cent in the current fiscal, up from 5 per cent a year ago. The index tried hard to move back into the positive territory however did not sustain as investors took the opportunity to cash in on the bounce back.

Meanwhile, sectoral indices on the NSE made a negative closing. CNX Media up 2.09%, CNX Metal up 1.85%, CNX Energy up 0.98%, CNX IT up 0.89% and CNX Infra up 0.87% were the top gainers in the trade. While, CNX Realty down 2.50%, CNX FMCG down by 2.33%, CNX bank down by 1.90% , CNX Finance down 1.75% and CNX MNC down by 0.30% were the top losers.

The India VIX witnessed an addition 3.58 % at 18.77 as compared to its previous close of 18.12 on Tuesday. The 50-share CNX Nifty lost 13.05 points or 0.23% to settle at 5,742.00.

Nifty August 2013 futures closed at 5781.05 on Wednesday at a premium of 39.05 points over spot closing of 5,742.00, while Nifty September 2013 futures ended at 5812.50 at a premium of 70.50 points over spot closing. Nifty August futures saw contraction of 0.65 million (mn) units taking the total outstanding open interest (OI) to 16.70 mn units. The near month August 2013 derivatives contract will expire on August 29, 2013.

From the most active contracts, Reliance Communications August 2013 futures last traded at a discount of 1.50 points at 139.75 compared with spot closing of 141.25. The number of contracts traded was 20,023.

DLF August 2013 futures last traded at a premium of 0.30 points at 150.40 compared with spot closing of 150.10. The number of contracts traded was 18,220.

Yes Bank August 2013 futures were at a premium of 5.20 points at 327.15 compared with spot closing of 321.95. The number of contracts traded was 45,672. 

Bharti Airtel August 2013 futures last traded at a premium of 3.50 points at 348.70 compared with spot closing of 345.20. The number of contracts traded was 20,389.

ICICI Bank August 2013 futures were at a premium of 11.85 points at 919.05 compared with spot closing of 907.20. The number of contracts traded was 43,740. 

Among Nifty calls, 6,000 SP from the Aug month expiry was the most active call with an addition of 0.42 million open interest.

Among Nifty puts, 5,700 SP from the Aug month expiry was the most active put with an addition of 0.54 million open interest.

The maximum OI outstanding for Calls was at 6,000 SP (5.91 mn) and that for Puts was at 5,700 SP (5.93mn).

The respective Support and Resistance levels of Nifty are: Resistance 5770.82 -- Pivot Point 5723.28 -- Support-- 5694.47.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.10 for Aug-month contract. The top five scrips with highest PCR on OI were Bharat Forg 3.00, Hind Zinc 3.00, Federal Bank 2.33, DR Reddy 1.36 and Ambuja Cement 1.23.

Among most active underlying, Jaiprakash Associates witnessed an addition of 6.94 million of Open Interest in the Aug month futures contract followed by R Com which witnessed an addition of 3.31 million of Open Interest in the near month contract; Hindalco Industries witnessed an addition  of 0.84 million in the Aug month futures. Also, Reliance Power witnessed contraction of 0.04 million in Open Interest in the Aug month contract and BHEL witnessed contraction of 0.04 million of Open Interest in the near month futures contract.