Bulls back with vengeance; Nifty reclaims 4,850 mark

After a percent fall on Friday, bulls hold their control throughout the day’s trade on Monday and Nifty ended remarkable day of trade with three percent gain recapturing its crucial 4,850 level as sentiments remained strong amid firm global cues. Asian markets jumped to their higher levels on hopes that Europe will come up with some concrete steps this week towards activating a crucial euro zone bail-out fund amidst much hyped reports stating International Monetary Fund’s (IMF) possibility of lending a helping hand to Italy. Data from the United States showing Americans spent a record $52.4 billion over Thanksgiving weekend also added to the upbeat mood. On domestic front, fresh buying in metal, banking and realty stocks too added the sentiments.

The Indian key benchmark made a big bang start as investors reacted positively to a solution on Italy’s debt problems last week. Afterwards, market extended its gains regaining its crucial 4,800 mark on fresh buying by funds and retail investors amid a firm trend in the Asian markets. Meanwhile, metal stocks like Hindalco, Jindal Steel, Sterlite Industries, NMDC, and Nalco witnessed jubilant run during the trade after copper prices in the international market climbed more than 2%, regaining ground after four weeks of losses. The index heavyweight Reliance Industries too made it presence felt by surging about four percentage points while Coal India too zoomed about four and half a percent in the session. In the noon trade domestic market remained firm despite the IMF denying reports that it was discussing a rescue package with Italy, which had earlier spurred sanguine sentiments across the globe. In the mid noon trade, market added some more gain and continued its northward journey following firm opening in European region. Meanwhile, software shares viz. Infosys, TCS, Wipro and HCL Tech rose on reports that Thanksgiving weekend retail sales in the US were strong. In the final hour of trade, market recaptured its crucial 4,850 mark gaining three percent point and snapped the session near its intraday high.

On the global front, the US markets closed lower on Friday while, market sentiment improved in Asia on Monday on the buzz that International Monetary Fund (IMF) is preparing Euro 600 billion loan for Italy in case the debt burden worsens. Moreover, European counterparts were trading in jubilant mood where CAC, DAX and FTSE were up by 2-4 percent at this point of time. Back home, all the sectoral indices on the NSE settled in the positive territory with CNX Metal gaining the most, up 4.97% followed by CNX PSU Bank up by 4.01%, Bank Nifty up by 3.59% and CNX Realty up by 3.34% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, tumbled 8.51% and reached 26.64.

The India VIX witnessed a contraction of 8.51% at 26.64 as compared to its previous close of at 29.12 on Friday

The 50-share S&P CNX Nifty accumulated 141.25 or 3.00% to settle at 4,851.30.

Nifty December 2011 futures closed at 4,873.50 at a premium of 22.20 points over spot closing of 4,851.30, while Nifty January 2011 futures were at 4,891.00 at a premium of 39.70 points over spot closing. The near month December 2011 derivatives contract expires on Thursday, December 29, 2011. Nifty December futures saw addition of 5.85% or 1.28 million (mn) units taking the total outstanding open interest (OI) to 23.20 mn units.

From the most active contract by contract value, SBI’s December 2011 futures were at a discount of 8.50 point at 1767.00 compared with spot closing of 1775.50. The number of contracts traded was 31,666.

ICICI Bank December 2011 futures were at a premium of 2.00 point at 752.50 compared with spot closing of 750.50. The number of contracts traded was 23,669.

L&T December 2011 futures were at a premium of 5.95 points at 1285.95 compared with spot closing of 1280.00. The number of contracts traded was 12,298.

Tata Motors December 2011 futures were at a discount of 1.10 points at 180.90 compared with spot closing of 182.00. The number of contracts traded was 15,389.

Tata Steel December 2011 futures were at a discount of 0.35 point at 388.10 compared with spot closing of 388.45. The number of contracts traded was 16,229.

Among Nifty calls, 5000 SP from the December month expiry was the most active call with addition of 4.44 million or 9.49%.

Among Nifty puts, 4700 SP from the December month expiry was the most active put with an addition of 0.98 million or 16.20%.

The maximum Call OI outstanding for Calls was at 5000 SP (5.12 mn) and that for Puts was at 4700 SP (7.00 mn).

The respective Support and Resistance levels are: Resistance 4884.80 -- Pivot Point 4825.6-- Support 4792.10.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.43 for December -month contract.

The top five scrips with highest PCR on OI were Patni 18.00, Cipla 1.76, ACC 1.51,  Ambuja Cement 1.50 and Siemens 1.41.

Among most active underlying, SBI witnessed an addition of 1.15% of Open Interest (OI) in the December month futures contract followed by ICICI Bank which witnessed a contraction of 1.21% of Open Interest (OI) in the near month contract. Meanwhile Tata Steels witnessed a contraction of 0.19% in the December month futures.