Nifty bounces back on smart recovery in rupee

Nifty managed to pull-back almost half of Tuesday's losses and closed above 5400 as the rupee recovered sharply from day’s low as the Reserve Bank of India (RBI) aggressively sold dollars to prevent the currency from falling to a record low of 68.80 hit on August 28.

A bout of initial volatility was witnessed as index regained positive terrain after slipping into the red in early deals as the rupee opened below the previous day’s closing. In late morning trade, index extended initial gains and hit fresh intraday high on the back of rupee's recovery by 135 paise. The index continued to trade firm in early afternoon trade. The index pared gains after hitting fresh intraday high in afternoon trade as European shares opened lower amid the increasing likelihood of U.S. military action in Syria. Amid high intraday volatility index regained strength in afternoon trade after Reserve Bank of India issued clarification on its recently revised Overseas Direct Investment Guidelines, which also led to substantial recovery of the Indian currency. In last leg off trade, index extended gains amid expectations of fresh measures by the central bank to support growth after Raghuram Rajan took over the helm of the Reserve Bank of India replacing D Subbarao.

Sectoral indices on the NSE made a green. CNX Media was down by 0.85% and CNX Realty was down by 0.34% were remained losers in the trade. While, CNX Metal was up by 2.64%, CNX Pharma was up by 2.54%, CNX Auto was up by 2.51%, CNX Infra was up by 2.38 and CNX IT was up by 2.36% were remained gainers in the trade.The India VIX witnessed contraction of 4.24% at 31.11 as compared to its previous close of 32.49 on Tuesday. The 50-share CNX Nifty gains 106.65 points or 2.00% to settle at 5,448.10.

Nifty September 2013 futures closed at 5458.05 on Wednesday at a premium of 9.95 points over spot closing of 5,448.10, while Nifty October 2013 futures ended at 5483.90 at a premium of 35.80 points over spot closing. Nifty September futures saw contraction of 0.17 million (mn) units taking the total outstanding open interest (OI) to 18.48 mn units. The near month September 2013 derivatives contract will expire on September 26, 2013.

From the most active contracts, JP Associates September 2013 futures last traded at a premium of 0.40 points at 36.75 compared with spot closing of 36.35. The number of contracts traded was 16,348.

DLF September 2013 futures were at a premium of 1.15 points at 127.15 compared with spot closing of 126.00. The number of contracts traded was 22,708. 

Tata Motors September 2013 futures last traded at a premium of 2.40 points at 313.40 compared with spot closing of 311.00. The number of contracts traded was 16,739.

Yes Bank September 2013 futures last traded at a premium of 2.50 points at 238.20 compared with spot closing of 235.70. The number of contracts traded was 24,968.

HDFC Bank September 2013 futures last traded at a premium of 3.40 points at 568.95 compared with spot closing of 565.55. The number of contracts traded was 14,328.

Among Nifty calls, 5,500 SP from the Sep month expiry was the most active call with an addition of 0.34 million open interest.

Among Nifty puts, 5,300 SP from the Sep month expiry was the most active put with an addition of 0.59 million open interest.

The maximum OI outstanding for Calls was at 5,500 SP (4.18mn) and that for Puts was at 5,300 SP (7.42 mn).

The respective Support and Resistance levels of Nifty are: Resistance 5499.27 -- Pivot Point 5409.083-- Support - 5357.92.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.50 for September month contract.

The top five scrips with highest PCR on OI were, Mcleodruss 71.00, CESC 9.00, Finan Tech 2.38, Ind Hotel 2.00 and Coal India 1.65.

Among most active underlying, SBI witnessed an addition of 0.09 million of Open Interest in the Sep month futures contract followed by Axis Bank  an addition of 1.66 million Open Interest in the near month contract; United Spirits witnessed an addition of 0.23 million in the Sep month futures. Also, Reliance Industries witnessed an addition of 0.29 million in Open Interest in the Sep month contract and TCS witnessed an addition of 1.55 million in Open Interest in the near month futures contract.