Nifty reclaims 5,600 as RBI announced measures to support the rupee

Nifty regained the psychological level of 5,600 and ended on a positive note after the central bank announced more measures to support the domestic currency. The Reserve Bank on Friday announced that it will sell government bonds worth Rs 22,000 crore every Monday to check volatility in the forex market. Investors were cautious about the industrial output data, consumer price inflation and manufacturing output data scheduled later in the day. Market expects industrial production to be subdued in June which would drag down factory output growth in the first quarter of the current financial year. Indian Rupee, the worst currency of Asia so far this year, pared its intra-day gains after the Finance Minister failed to provide details of measures to protect rupee. The currency traded at 61.06 a dollar from Friday's close of 60.88 at the Interbank Foreign Exchange Market.

Asian markets provided additonal support to the domestic markets with most of the regional peers ending in the green terrain, as sentiments remained buoyed by positive economic data out of China late last week. China reported industrial growth for July at a five-month high, easing fears that the world’s second largest economy was heading towards a slowdown. Though, European markets traded lower in early deals.

After a gap-up opening, index  have failed to hold the gaining momentum and was trading mixed in the Monday’s early deals on report that foreign institutional investors (FIIs) sold shares worth a net Rs 395.78 crore on August 8, 2013. Index regained strength and hit fresh intraday high in early afternoon trade after knowing that finance ministry is set to unveil a slew of measures to boost capital flows, which will help stabilise the rupee. Investors cashed out some gains in late trade, ahead of the industrial output data scheduled later in the day. Street expects the industrial production to remain subdued in June which would drag down factory output growth in the first quarter of the current financial year.

Sectoral indices on the NSE made a green closing. CNX PSU Bank was down by 1.53%, CNX bank down 1.07%, CNX Energy down 0.66%, CNX Finance was down 0.06% and remained the top losers in the trade. While, CNX Metal up by 4.48%, CNX FMCG up by 2.39%, CNX Commodities up by 1.90%, CNX Pharma up by 1.89% and CNX PSE up by 1.79% remained the gainers in the trade. The India VIX witnessed an addition of 0.42% at 21.28 as compared to its previous close of 21.19 on Thursday. The 50-share CNX Nifty gain 46.75 points or 0.84 % to settle at 5,612.40.

Nifty August 2013 futures closed at 5621.75 on Monday at a premium of 9.35 points over spot closing of 5,612.40, while Nifty September 2013 futures ended at 5649.35 at a premium of 36.95 points over spot closing. Nifty August futures saw contraction of 1.20 million (mn) units taking the total outstanding open interest (OI) to 14.63 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 discount of 0.95 points at 138.60 compared with spot closing of 139.55. The number of contracts traded was 13,982.

Tata Steel August 2013 futures were at a premium of 1.60 points at 237.20 compared with spot closing of 235.60. The number of contracts traded was 27,644. 

Yes Bank August 2013 futures last traded at a premium of 2.45 points at 302.25 compared with spot closing of 299.80. The number of contracts traded was 32,083.

ICICI Bank August 2013 futures last traded at a premium of 6.00 points at 870.25 compared with spot closing of 864.25. The number of contracts traded was 17,497.

Reliance Industries August 2013 futures were at a premium of 6.30 points at 848.30 compared with spot closing of 842.00. The number of contracts traded was 14,786.  Among Nifty calls, 6,000 SP from the Aug month expiry was the most active call with contraction of 0.16 million open interest. Among Nifty puts, 5,400 SP from the Aug month expiry was the most active put with an addition of 0.34 million open interest.

The maximum OI outstanding for Calls was at 6,000 SP (6.45 mn) and that for Puts was at 5,400 SP (7.16 mn). The respective Support and Resistance levels of Nifty are: Resistance 5651.97 -- Pivot Point 5604.53 -- Support - 5564.97.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.99 for August month contract.

The top five scrips with highest PCR on OI were Bharat Forg 2.90, Ranbaxy 1.63, Federal Bnk 1.43, Infosys 1.42 and Gail 1.38.

Among most active underlying, JP Associates witnessed  contraction of 1.15 million of Open Interest in the Aug month futures contract followed by Reliance Communications which witnessed contraction of 0.20 million of Open Interest in the near month contract; DLF witnessed an addition of 0 .44 million in the Aug month futures. Also, BHEL witnessed contraction of 0.27 million in Open Interest in the Aug month contract and Hindalco Industries witnessed contraction of 0.87 million of Open Interest in the near month futures contract.