Nifty closes higher; manages to cross 5,550 level

Nifty rebounded after two days of sharp losses to end higher on Thursday after a strengthening rupee led to short covering in index heavyweights while Ranbaxy Labs zoomed after healthy US business growth on sequential basis helped restore investor confidence. The Indian rupee firmed against the US dollar. The local currency was up 41 paise at 60.89 against the dollar on selling of the US currency by banks and exporters amidst volatile equity market.

Mostly positive global set-up also encouraged investors to take position ahead of the data heavy week. On the global front, Asian markets bounced back after sharp declines in the previous session, as China posted upbeat trade figures that bolstered the outlook for the world's second-biggest economy. While, European shares too advanced as an increase in Chinese exports outweighed investor concerns of paring bond purchases by the Federal Reserve.

After plunging close to nine percent in two weeks, indexes made positive start on Planning Commission Deputy Chairman Montek Singh Ahluwalia’s statement that the economy is likely to grow at 5.5 percent this financial year.  In late morning session, a bout of initial volatility was witnessed as index alternately moved between the gains and losses near the flat line.  Index extended their gains in the early afternoon as rupee appreciated against greenback, amid expectations of further steps from the government and the RBI to limit further fall in the currency. Moreover, the government is reportedly planning to relax borrowing rules for debt-laden Indian companies, including doubling the amount a firm can borrow overseas to $1.5 billion. In last leg the index extended intraday gains and hit fresh intraday highs to close above the 5550 level.

Sectoral indices on the NSE made a green closing. CNX PSU Bank was down by 1.40%, CNX Pharma was down 0.31% and CNX Energy down 0.09% remained the top losers in the trade. While, CNX Metal up by 2.73%, CNX Realty Bank up by 2.26%, CNX Auto up by 1.78%, CNX Infra up by 1.52% and CNX MNC up by 1.52% remained the gainers in the trade.

The India VIX witnessed contraction of 3.86 % at 21.19 as compared to its previous close of 22.04 on Wednesday. The 50-share CNX Nifty gain 46.55 points or 0.84 % to settle at 5,565.65.

Nifty August 2013 futures closed at 5589.70 on Thursday at a premium of 24.05 points over spot closing of 5,565.65, while Nifty September 2013 futures ended at 5620.05 at a premium of 54.40 points over spot closing. Nifty August futures saw contraction of 0.26 million (mn) units taking the total outstanding open interest (OI) to 15.83 mn units. The near month August 2013 derivatives contract will expire on August 29, 2013.

From the most active contracts, DLF August 2013 futures last traded at a premium of 1.35 points at 138.05 compared with spot closing of 136.70. The number of contracts traded was 16,145.

Tata Motors August 2013 futures last traded at a premium of 3.00 points at 280.90 compared with spot closing of 277.90. The number of contracts traded was 25,614.

Tata Steel August 2013 futures were at a discount of 0.05 points at 219.80 compared with spot closing of 219.85. The number of contracts traded was 16,114. 

Yes Bank August 2013 futures last traded at a premium of 3.00 points at 284.70 compared with spot closing of 281.70. The number of contracts traded was 20,461.

HDFC Bank August 2013 futures were at a premium of 5.15 points at 613.60 compared with spot closing of 608.45. The number of contracts traded was 10,340.  Among Nifty calls, 6,000 SP from the Aug month expiry was the most active call with contraction of 0.09million open interest. Among Nifty puts, 5,400 SP from the Aug month expiry was the most active put with an addition of 0.35 million open interest.

The maximum OI outstanding for Calls was at 6,000 SP (6.61 mn) and that for Puts was at 5,400 SP (6.82 mn). The respective Support and Resistance levels of Nifty are: Resistance 5592.15 -- Pivot Point 5551.1 -- Support - 5524.6.

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

The top five scrips with highest PCR on OI were Bharat Forg 3.00, Ranbaxy 1.75, Power Grid 1.34, Mcleodruss 1.33 and Infosys 1.32.

Among most active underlying, JP Associates witnessed  contraction of 0.01 million of Open Interest in the Aug month futures contract followed by Unitech which witnessed an addition of 2.37 million of Open Interest in the near month contract; Reliance Communications witnessed an addition of 0.50 million in the Aug month futures. Also, BHEL witnessed contraction of 0.12 million in Open Interest in the Aug month contract and DLF witnessed an addition of 0.28 million of Open Interest in the near month futures contract.