Bulls hit back once again; Nifty up over 0.50%

Bulls retaliated back once again on Wednesday and the local index S&P CNX Nifty snapped the day’s trade with a gain of over half a percentage point. Huge amount of volatility witnessed in second half of trade after a choppy first half. Market saw about 60 points sharp rise in final hour of trade, following recovery in European markets. While, sustained buying in select index heavyweights like Reliance, ITC, ONGC and Bharti Airtel helped the index to bounce back into the positive zone. However, global cues remained mixed as US markets ended mixed overnight, while Asian markets snapped the day’s trade mostly in the red on renewed euro-zone woes. Moreover, the Indian rupee appreciated further by 32 paise to 52.35 a dollar.

The domestic benchmark made a gap-down opening on the back of sustained selling by funds, triggered by stiff opposition to policy reform opening up the multi-brand retail sector to foreign direct investment. Meanwhile, the sentiments also remained dampened as Standard & Poor’s cut credit ratings on US lenders from Bank of America Corp. to Goldman Sachs Group Inc., Citigroup Inc., and Morgan Stanley had their long-term credit grades cut to A- from A at S&P. Afterwards, market traded choppy as investors waited for Q2 GDP numbers but, once the numbers came out market pared all of its losses despite disappointing Q2 GDP data as traders were already prepared for that. Gross Domestic Product (GDP) grew at 6.9% in the July - September quarter, the slowest pace in nine quarters. In the April-June quarter, the economy grew at 7.7%. Manufacturing sector saw a growth of 2.7%, as compared to 7.2% in the previous quarter. Market touched its intraday high near its crucial 4,850 mark but, unable to sustain those level and witnessed a sharp fall of about 60 points in the mid noon trade following subdued opening in European counterparts. However, a bout of volatility was seen in final hour of trade and market rebounded recapturing its crucial 4,800 mark following recovery in European peers. Finally, Nifty snapped the session with a gain of over half a percent holding its psychological 4,800 mark firmly, supported by buying in blue chips like RIL, ONGC and Bharti Airtel.

On the global front, the US markets made a mixed closing overnight despite a good report of consumer confidence that rebounded in November while, Asian stock markets shrugged off the moderate advances seen on early trading, with the major indexes dipping into red amid growing concerns about Euro-zone plan to stem the debt crisis. Moreover, most of the European counterparts were trading in the negative terrain at this point of time. Back home, most of the sectoral indices on the NSE were settled in the green, CNX Energy remained the major gainer, up 1.68% followed by CNX FMCG up 1.20% and CNX PSE up by 1.06% while CNX Media and CNX Auto declined 1.26% and 0.78% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 1.19% and reached 26.55.

The India VIX witnessed a contraction of 1.19% at 26.55 as compared to its previous close of at 26.87 on Tuesday

The 50-share S&P CNX Nifty gained 26.95 or 0.56% to settle at 4,832.05.

Nifty December 2011 futures closed at 4,843.25 at a premium of 11.20 points over spot closing of 4,832.05, while Nifty January 2011 futures were at 4,864.00 at a premium of 31.95 points over spot closing. The near month December 2011 derivatives contract expires on Thursday, December 29, 2011. Nifty December futures saw addition of 7.92% or 1.75 million (mn) units taking the total outstanding open interest (OI) to 23.91 mn units.

From the most active contract by contract value, ICICI Bank December 2011 futures were at a premium of 4.10 point at 734.40 compared with spot closing of 730.30. The number of contracts traded was 76,255.

SBI's December 2011 futures were at a discount of 5.25 point at 1734.00 compared with spot closing of 1739.25. The number of contracts traded was 48,735.

Bharti Airtel December 2011 futures were flat at 378.70 compared with spot closing of 378.70. The number of contracts traded was 26,495.

Infosys December 2011 futures were at a premium of 5.00 points at 2627.00 compared with spot closing of 2622.00. The number of contracts traded was 16,322.

RIL December 2011 futures were at a premium of 2.40 point at 785.65 compared with spot closing of 783.25. The number of contracts traded was 22,739.

Among Nifty calls, 4900 SP from the December month expiry was the most active call with contraction of 0.51 million or 10.94%.

Among Nifty puts, 4700 SP from the December month expiry was the most active put with an addition of 1.81 million or 26.62%.

The maximum Call OI outstanding for Calls was at 4900 SP (4.13 mn) and that for Puts was at 4700 SP (8.64 mn).

The respective Support and Resistance levels are: Resistance 4870.80-- Pivot Point 4812.80-- Support 4774.05.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.35 for December -month contract.

The top five scrips with highest PCR on OI were Patni 10.71, Voltas 6.00,Cipla 2.03, BF Utilities 2.00 and Financial Technologies (India) 1.50.

Among most active underlying, ICICI Bank witnessed an addition of 45.23% of Open Interest (OI) in the December month futures contract followed by SBI which witnessed an addition of 11.74% of Open Interest (OI) in the near month contract. Meanwhile Bharti Airtel witnessed an addition of 60.60% in the December month futures. Also, reliance Indistries witnessed an addition of 3.99% in Open Interest (OI) in the December month contract. Finally, Tata Motors witnessed an addition of 4.12% of Open Interest (OI) in the near month futures contract.