Nifty pares early morning gains; closes below 5950

Nifty closed below the 5,950-mark after a gap-up opening and subsequently retreating almost a percentage point from the highs, following profit-booking in banks that opened much above their previous closing on Tuesday. Other rate-sensitives like realty and capital goods remained top sectoral performers following the Reserve Bank of India's move to cut the marginal standing facility (MSF) rate by 50 basis points to 9 per cent.

Nifty made firm opening in early deals with its 5,950 levels after the Reserve Bank of India (RBI), in a surprise move, eased the liquidity tightening measures it had initiated earlier, by reducing the marginal standing facility (MSF) rate by a further 50 basis points (bps). Sentiments got boosted on report that foreign institutional investors (FIIs) bought shares worth a net Rs 494.13 crore on October 7, 2013. This is the second time in less than a month that the central bank has cut the key overnight interest rate, taking advantage from the rupee’s recent surge. A bout of volatility was witnessed as index regained strength and hit its highest level in more than two weeks. Sentiments also remained up-beat after the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.685, compared with its close of 61.79/80 on Monday.

Afternoon trade, index cut intraday gains and hit fresh intraday low in trade as sluggish opening in European counterparts dampened the sentiments amid concerns that the political deadlock in the US could continue, potentially hampering efforts to raise the US government's borrowing limit. Rupee reversing intraday gains against the dollar also added to pessimistic sentiments on the street. Final hours of trade, Index managed to end slightly higher from the lows on buying in select rate-sensitive counters.

NSE sectoral indices made a green closing. CNX Infra up by 1.80%, CNX Realty 1.23%, CNX FMCG up by 1.09%, CNX Bank up by 0.59% and  CNX Energy up by 0.37%. On the other hand, CNX Media down by 1.58%, CNX Metal down by 0.77%, CNX MNC down by 0.36% and CNX IT down by 0.31% were the losers.

The India VIX decreased by 1.04 % at 26.55 as compared to its previous close of 26.83 on Monday. The 50-share CNX Nifty inclined by 22.25 points or 0.38% to settle at 5,928.40.

Nifty October 2013 futures closed at 5959.45 on Tuesday at a premium of 31.05 points over spot closing of 5,928.40, while Nifty November 2013 futures ended at 6001.40 at a premium of 73.00 points over spot closing. Nifty October futures saw contraction of 0.56 million (mn) units taking the total outstanding open interest (OI) to 15.47 mn units. The near month October 2013 derivatives contract will expire on October 31, 2013.

From the most active contracts, DLF October 2013 futures last traded at a premium of 1.70 points at 139.85 compared with spot closing of 138.15. The number of contracts traded was 12,984.

Tata Motors October 2013 futures last traded at a premium of 2.95 points at 353.60 compared with spot closing of 350.65. The number of contracts traded was 12,145.

Tata Steel October 2013 futures were at a premium of 2.45 points at 298.70 compared with spot closing of 296.25. The number of contracts traded was 13,457. 

Yes Bank October 2013 futures last traded at a premium of 3.65 points at 330.70 compared with spot closing of 327.05. The number of contracts traded was 29,538.

HDFC Bank October 2013 futures were at a premium of 8.20 points at 637.20 compared with spot closing of 629.00. The number of contracts traded was 10,200.  Among Nifty calls, 6,100 SP from the October month expiry was the most active call with contraction of 0.12 million open interest.

Among Nifty puts, 5,700 SP from the October month expiry was the most active put with an addition of 0.09 million open interest.

The maximum OI outstanding for Calls was at 6,100 SP (4.56 mn) and that for Puts was at 5,700 SP (4.96 mn).

The respective Support and Resistance levels of Nifty are: Resistance 5969.07 -- Pivot Point 5941.03 -- Support -- 5900.37.

The Nifty Put Call Ratio (PCR) OI wise, stood at 1.28 for October month contract. The top five scrips with highest PCR on OI were, Havells 6.00, Ultra Cemco 1.92, Opto Circui 1.78, Siemens 1.56, and Bank India 1.53.

Among most active underlying, SBI witnessed addition of 0.27 million of Open Interest in the October month futures contract followed by Infosys with an addition of 0.09 million Open Interest in the near month contract; United Spirits witnessed addition of 0.03 million of Open Interest in the October month futures. Reliance Industries witnessed an addition of 0.04 million in Open Interest in the October month contract and Yes Bank witnessed contraction  of 0.69million in Open Interest in the near month futures contract.