IT stocks lift nifty to close above 6,300 levels

Pressurized by weak global cues, Nifty made a flat opening with a negative bias in early deals. The US markets mostly made a lower closing in last session on some weak earnings and economic data. Moreover, most of the Asian equity indices were trading in the negative terrain at this point of time as Chinese gross domestic product (GDP) expanded 7.7% last year, its slowest rate in 14 years at a time of concern about the strength of the world’s number two economy. Growth for the December quarter also came in at 7.7%, slowing from 7.8% in the previous three months. Back home, sentiments remained somber with public sector oil marketing companies edging lower in early deals after Oil Minister M Veerappa Moily has announced that the quota of subsidised cooking cylinders will be hiked to 12 from 9 per household. Increasing the limit to 12 would result in an additional fuel subsidy burden of Rs 3,300 crore-5,800 crore for the government.

Sentiments also remained dampened after Indian rupee was trading tad lower on global dollar strength, at 61.58 per dollar versus its Friday’s close of 61.54/55 per dollar. However, during mid morning session, trend reversed and reached near day’s high led by IT and bank shares. Investors added IT stocks to their portfolio after the sector suffered a selloff in Friday's trade. The market beating results from Wipro, announced after the market hours on Friday, boosted sentiment in IT stocks. Sentiments also got some support on report that FII’s remained on their buying spree and increased their stake in major companies in the December quarter. However, gains on up-side remained capped as the investors eyeing major policy events in the coming days remained on the sidelines.

The index, pared some of its early gains in noon trade on account of some profit-booking at higher levels but in the last leg of trade, index rose by over forty points above its psychological 6,300 level with frontline gauges garnering gains of over half a percentage point. The up-move was mainly supported by rally in some blue-chip stocks on the back of strong third quarter earnings.

Most of the NSE sectoral indices made a green closing; CNX IT up by 2.78%, CNX Media up by 1.41%, CNX Service up by 1.32%, CNX FMCG up by 1.17% and CNX Media 1.41% were the gainer on index. On the other hand, CNX Energy down by 0.75% and CNX Pharma down by 0.04% were the top losers on index.

The India VIX decreased by 0.38% at 15.35 as compared to its previous close of 15.41 on Friday. The 50-share CNX Nifty increased by 42.30 points or 0.68% to settle at 6,303.95.

Nifty January 2014 futures closed at 6320.15 on Monday at a premium of 16.20 points over spot closing of 6,303.95, while Nifty February 2014 futures ended at 6357.15 at a premium of 53.20 points over spot closing. Nifty January futures saw contraction of 0.89 million (mn) units taking the total outstanding open interest (OI) to 17.08 mn units. The near month January 2014 derivatives contract will expire on January 30, 2014.

From the most active contracts, Reliance Communications January 2014 futures traded flat compared with spot closing of 132.90. The number of contracts traded was 14,188. 

Aurobindo Pharma January 2014 futures traded at a discount of 0.15 points at 410.75 compared with spot closing of 410.90. The number of contracts traded was 16,547.

Reliance Industries January 2014 futures were at a premium of 5.60 points at 873.60 compared with spot closing of 868.00. The number of contracts traded was 22,643. 

ICICI Bank January 2014 futures were at a premium of 2.40 points at 1048.70 compared with spot closing of 1,046.30. The number of contracts traded was 14,112. 

SBI January 2014 futures were at a discount of 1.50 points at 1644.40 compared with spot closing of 1645.90. The number of contracts traded was 18,131.  

 Among Nifty calls, 6,300 SP from the January month expiry was the most active call with contraction of 0.32 million in open interest.

Among Nifty puts, 6,200 SP from the January month expiry was the most active put with an addition of 1.55 million open interests.

The maximum OI outstanding for Calls was at 6,300 SP (4.89 mn) and that for Puts was at 6,200 SP (7.13 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6326.48 -- Pivot Point 6284.92 - Support - 6262.38.

The Nifty Put Call Ratio (PCR) OI wise, stood at 1.30 for January month contract.

The top five scrips with highest PCR on OI were DR Reddy 3.04, HCL Tech 2.21, Infosys 2.06, HDFC 1.63 and Apollo Tyre 1.40.

Among most active underlying, SBI witnessed contraction of 0.05 million of Open Interest in the January month futures contract followed by Infosys witnessed an addition of 0.03 million of Open Interest in the January month contract; United Spirits witnessed contraction of 0.99 million of Open Interest in the January month futures. Reliance Industries witnessed an addition of 0.46 million of Open Interest in the January month contract and TCS witnessed contraction of 0.28 million in Open Interest in the near month futures contract.