Nifty ends marginally higher amid volatile trading

Nifty has snapped eight-day losing streak and ended marginally higher amid volatile trading session led by buying among metal shares and index heavyweights RIL and ITC. Sentiments got some support from FICCI’s survey that India’s manufacturing sector is likely to witness a ‘slight upturn’ in the second quarter on the back of government’s efforts to remove bottlenecks by clearing large projects and a better export outlook. Sentiments also got boost from report that the Finance Ministry is likely to finalize Rs 14,000-crore capital infusion for public sector banks by the end of this month to meet their global capital requirement norms, Basel III. Sentiments were further boosted with report that foreign institutional investors (FIIs) bought shares worth a net Rs 283.79 crore on August 2, 2013. However, the upside was capped by engineering major BHEL which slumped by over 19% post the announcement of disappointing Q1 numbers. Sentiments got dented after India’s services PMI contracted first time in 20 months to 47.9 points in July from 51.7 points in the previous month. A reading above 50 points indicates growth, while that below 50 signifies a contraction in the sector. Moreover, last week, Manufacturing PMI managed to stay afloat the growth line as it fell to 50.1 points in July from 50.3 points in June. Consequently, the Composite PMI - considering both manufacturing and services - also contracted to 48.4 points in July from 50.9 points in June this year.

Firm opening in European markets too supported the sentiments with all major indices CAC, DAX and FTSE trading in the green, extending gains for the sixth straight session on Monday. The Asian equity indices too ended mostly in the green with Shanghai Composite leading the pack, garnering a gain of over a percentage points.

After making positive start, a bout of initial volatility was witnessed as index alternately swung between positive and negative zone and have edged higher in late morning trade, on the back of short-covering witnessed in metal and mining stocks on hopes of growth recovery in China after country’s services sector growth showed some resilience. In early afternoon trade, index trimmed gains after India’s services PMI contracted first time in 20 months to 47.9 points in July from 51.7 points in the previous month. In last leg off trade the index regain positive terrain as European stocks rose.

Meanwhile, sectoral indices on the NSE made green closing. CNX Infra down 1.47%, CNX Pharma down 0.57%, CNX Auto down 0.48%, CNX Consumption down 0.14% and CNX PSE down 0.08% remained the top losers in the trade. While, CNX Metal up by 2.34%, CNX Media up by 1.96%, CNX PSU Bank up by 1.49%, CNX Bank up by 0.97% and CNX Commodities up by 0.96% remained the gainers in the trade.

The India VIX witnessed contraction 0.43% at 20.80 as compared to its previous close of 20.89 on Friday. The 50-share CNX Nifty gain 7.50 points or 0.13% to settle at 5,685.40.

Nifty August 2013 futures closed at 5723.60 on Monday at a premium of 38.20 points over spot closing of 5,685.40, while Nifty September 2013 futures ended at 5753.70 at a premium of 68.30 points over spot closing. Nifty August futures saw contraction of 0.20 million (mn) units taking the total outstanding open interest (OI) to 15.24 mn units. The near month August 2013 derivatives contract will expire on August 29, 2013.

From the most active contracts, JP Associates August 2013 futures last traded at a premium of 0.25 points at 31.60 compared with spot closing of 31.35. The number of contracts traded was 16,225.

BHEL August 2013 futures last traded at a premium of 1.15 points at 121.35 compared with spot closing of 120.20. The number of contracts traded was 21,019.

DLF August 2013 futures were at a discount of 0.05 points at 130.05 compared with spot closing of 130.10. The number of contracts traded was 17,902. 

Tata Motors August 2013 futures last traded at a discount of 0.30 points at 286.20 compared with spot closing of 286.50. The number of contracts traded was 13,577.

Yes Bank August 2013 futures were at a premium of 3.80 points at 302.30 compared with spot closing of 298.50. The number of contracts traded was 23,976.  Among Nifty calls, 6,000 SP from the Aug month expiry was the most active call with an addition of 0.11 million open interest.

Among Nifty puts, 5,700 SP from the Aug month expiry was the most active put with contraction of 0.01 million open interest.

The maximum OI outstanding for Calls was at 6,000 SP (7.06 mn) and that for Puts was at 5,700 SP (5.99 mn).

The respective Support and Resistance levels of Nifty are: Resistance 5717.1 -- Pivot Point 5689.3 - Support -- 5657.6.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.00 for August month contract. The top five scrips with highest PCR on OI were Federal Bank 2.33, Hind Zinc 2.33, Grasim 1.67, Bharat Forge 1.63 and Infosys 1.35.

Among most active underlying, JP Associates witnessed an addition of 0.51 million of Open Interest in the Aug month futures contract followed by Unitech which witnessed contraction of 3.48 million of Open Interest in the near month contract; Reliance Communications witnessed an addition  of 1.86 million in the Aug month futures. Also, BHEL witnessed an addition of 2.20 million in Open Interest in the Aug month contract and Hindalco Industries witnessed an addition of 0.22 million of Open Interest in the near month futures contract.