Nifty ends above 6,300 levels on hopes of rate cut

Nifty made a gap-up start in early deals on Wednesday ahead of release of inflation data later in the day. Wholesale price index-based (WPI) inflation data was expected to cool a bit from a 14-month high of 7.52 percent in November and strengthen hopes that RBI will maintain a status quo in its upcoming monetary policy review. There was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Supportive cues from US markets provided the much-needed support to local markets in early deals. Sentiments also remained up-beat on the back of better-than-expected U.S. retail sales data for the month of December. Moreover, most of the Asian equity benchmarks were trading in the green in late morning at this point of time with the Nikkei bouncing by over one and a half percent after suffering its sharpest daily drop in five months on Tuesday.

During noon trade, buying intensified on the street after better than expected inflation figures which bolstered hopes of RBI slashing rates by 25 basis points by March 31, 2014. Reacting to this good news, banking stocks gaining traction lifted the entire index higher. Sentiments also got bolstered after Yes Bank reported better-than-expected third quarter numbers. The bank reported 21% rise in its net profit at Rs 415.60 crore for the quarter as compared to the same quarter in the previous year. On the currency front, Indian rupee marginally appreciated and traded at 61.50 per dollar at the time of closing of equity markets, as compared to its previous close of 61.52 per dollar. Gains of the bourse could be attributed to across the board buying activities coupled with optimistic global set-up. Meanwhile, broader indices, showing a degree of underperformance, ended with gains within the range of quarter of a percent.

Most of the NSE sectoral indices made a green closing; CNX PSU Bank up by 1.88%, CNX Finance up by 1.84%, CNX Bank up by 1.61%, CNX Infra up by 1.54% and CNX Service up by 1.32% was the top gainers on index. On the other hand, CNX Media down by 0.42% was the top losers on index.

The India VIX decreased by 2.03% at 15.42 as compared to its previous close of 15.74 on Tuesday. The 50-share CNX Nifty increased by 79.05 points or 1.27% to settle at 6,320.90.

Nifty January 2014 futures closed at 6331.10 on Wednesday at a premium of 10.20 points over spot closing of 6,320.90, while Nifty February 2014 futures ended at 6365.50 at a premium of 44.60 points over spot closing. Nifty January futures saw an addition of 0.46 million (mn) units taking the total outstanding open interest (OI) to 18.20 mn units. The near month January 2014 derivatives contract will expire on January 30, 2014.

From the most active contracts, Yes Bank  January 2014 futures were at a premium of 1.00 points at 354.25 compared with spot closing of 353.25. The number of contracts traded was 23,807. 

HDFC Bank January 2014 futures traded at a premium of 2.10 points at 682.10 compared with spot closing of 680.00. The number of contracts traded was 11,562.

Reliance Industries January 2014 futures were at a premium of 5.00 points at 887.50 compared with spot closing of 882.50. The number of contracts traded was 18,143. 

ICICI Bank January 2014 futures were at a premium of 3.50 points at 1063.50 compared with spot closing of 1,060.00. The number of contracts traded was 23,443. 

Coal India January 2014 futures were at a premium of 0.65 points at 295.90 compared with spot closing of 295.25. The number of contracts traded was 18,971.     Among Nifty calls, 6,400 SP from the January month expiry was the most active call with contraction of 0.06 million in open interest.

Among Nifty puts, 6,200 SP from the January month expiry was the most active put with contraction of 0.85 million open interest.

The maximum OI outstanding for Calls was at 6,400 SP (4.87mn) and that for Puts was at 6,200 SP (7.12 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6342.3 -- Pivot Point 6303.8 - Support - 6282.4.

The Nifty Put Call Ratio (PCR) OI wise, stood at 1.19 for January month contract.

The top five scrips with highest PCR on OI were DR Reddy 3.17, Infosys 1.86, Apollo Tyre 1.43, HCL Tech 1.21 and Jublfood 1.19.

Among most active underlying, SBI witnessed an addition of 0.02 million in Open Interest in the January month futures contract followed by Infosys witnessed an addition of 0.21 million of Open Interest in the January month contract; United Spirits witnessed an addition of 0.01 million of Open Interest in the January month futures. Reliance Industries witnessed contraction of 0.31 million of Open Interest in the January month contract and TCS witnessed contraction of 0.04 million in Open Interest in the near month futures contract.