Nifty closes above 6,200 levels on RBI status-quo stance

Nifty edged higher in early deals on Wednesday ahead of the outcome of the central bank’s policy review. The RBI was widely expected to raise its key repo rate by 25 basis points to eight percent, given the price rises at both the retail and wholesale levels. Some support also came in from reports that foreign institutional investors (FIIs) bought shares worth a net Rs 249.93 crore on December 17, 2013, as per provisional data from the stock exchanges. Asian equity benchmarks were trading in the green led by Japanese Nikkei, which surged over one and a half percent, as the country saw a merchandise trade deficit of 1.292 trillion yen in November, beating forecasts for a shortfall of 1.351 trillion yen.

Investors turned euphoric on street in late morning after Reserve Bank of India (RBI), in its December mid-quarter monetary policy review, delivered the unexpected and maintained a status quo stance on its key policy rates as it left the policy repo rate and reverse repo rate under the liquidity adjustment facility (LAF) unchanged at 7.75% and 6.75% respectively. Although nifty cooled off from day’s high point in noon trade, it re-gained fervor yet again in the dying hours of the trade and puffed up gains of close to one and a half percent near day’s high point, which took it past the crucial 6,200 levels.

NSE sectoral indices made a green closing; CNX Realty up by 3.39%, CNX PSU Bank up by 3.03%, CNX Energy up by 2.15%, CNX Infra up by 1.93% and CNX PSE up by 1.76% were the gainers on index. On the other hand, there was no loser on index.

The India VIX decreased by 4.30% at 17.54 as compared to its previous close of 18.33 on Monday. The 50-share CNX Nifty increased by 78.10 points or 1.27% to settle at 6,217.15.

Nifty December 2013 futures closed at 6249.65 on Wednesday at a premium of 32.50 points over spot closing of 6,217.15, while Nifty January 2014 futures ended at 6303.00 at a premium of 85.85 points over spot closing. Nifty December futures saw an addition of 0.17 million (mn) units taking the total outstanding open interest (OI) to 22.04 mn units. The near month December 2013 derivatives contract will expire on December 26, 2013.

From the most active contracts, Power Grid Corporation of India December 2013 futures traded at a premium of 0.10 points at 100.05 compared with spot closing of 99.95. The number of contracts traded was 53,850.

DLF December 2013 futures were at a premium of 0.50 points at 161.05 compared with spot closing of 160.55. The number of contracts traded was 18,406. 

Aurobindo Pharma December 2013 futures were at a premium of 2.95 points at 377.20 compared with spot closing of 374.25. The number of contracts traded was 27,925. 

HDFC Bank December 2013 futures were at a premium of 2.40 points at 670.15 compared with spot closing of 667.75. The number of contracts traded was 19,134. 

Reliance Industries December 2013 futures were at a premium of 1.75 points at 863.05 compared with spot closing of 861.30. The number of contracts traded was 15,766. 

Among Nifty calls, 6,300 SP from the December month expiry was the most active call with contraction of 0.27 million open interest.

Among Nifty puts, 6,000 SP from the December month expiry was the most active put with marginal an addition in open interest.

The maximum OI outstanding for Calls was at 6,300 SP (6.79 mn) and that for Puts was at 6,000 SP (5.68 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6258.78-- Pivot Point 6194.37- Support -- 6152.73.The Nifty Put Call Ratio (PCR) OI wise, stood at 1.10 for December month contract. The top five scrips with highest PCR on OI were Auro Pharma 1.98, Mcleodruss 1.97, Infosys 1.65, HDFC Bank 1.63 and DR Reddy 1.35.

Among most active underlying, Power Grid Corporation of India witnessed contraction of 1.83 million in Open Interest in the December month futures contract followed by SBI with marginal an addition in Open Interest in the December month contract; United Spirits witnessed contraction of 1.00 million of Open Interest in the December month futures. Reliance Industries witnessed contraction of 0.91 million of Open Interest in the December month contract and ICICI Bank witnessed an addition of 0.39 million in Open Interest in the near month futures contract.