Hectic buying in last hour of trade helps Nifty to close above 6330 level

Nifty opened in the red in early deals near its previous-closing level, as traders remained cautious concerned on Urjit Patel committee’s report, which suggested that inflation should be the nominal anchor as far as the policy framework is concerned. The committee has suggested that the RBI should adopt the new CPI (consumer price index) as the measure of the nominal anchor for policy communication and the target for inflation should be set at 4 percent with a band of +/- 2 percent around it. On the global front, the US markets coming out of a long weekend had made a mixed closing on Tuesday and traders seemed reluctant to make any significant moves lacking any major economic data. Asian equity indices too struggled to get traction and were exhibiting mixed trade at this point of time, hampered by expectations of further reductions in the US Federal Reserve's stimulus and ahead of central bank meetings in Japan and Thailand. However, Tthe trend reverseed in late morning on account of buying in private banking majors such as ICICI Bank, HDFC Bank and Axis Bank on expectation that the RBI would continue to maintain status quo on key policy rates at its meeting scheduled on January 28.

In the highly range-bound session in noon trade, index managed to keep its head above water, with little gains of over one tenths of a percent thanks to supportive global set-up. Further, some hectic buying activity took place on street during the fag end of trade, which recorded highest close in 2014, ending past the psychological 6,330 levels, with gains of around half a percent on Wednesday. Gains of select blue-chip stocks, viz, Infosys, Reliance Industries and Sun Pharmaceuticals. Broader indices too ended with gains of over two tenth of a percent.

Most of the NSE sectoral indices made a green closing; CNX PSU Bank up by 0.19% and CNX FMCG Bank up by 0.08% were the gainer on index. On the other hand, CNX Pharma down by 1.58%, CNX Metal down by 0.95%, CNX Energy down by 0.83%, CNX Realty down by 0.73% and CNX Media down by 0.73% were the top losers on index. The India VIX increased by 1.92% at 15.85 as compared to its previous close of 15.55 on Tuesday. The 50-share CNX Nifty increased by 25.15 points or 0.40% to settle at 6,338.95.

Nifty January 2014 futures closed at 6353.00 on Wednesday at a premium of 14.05 points over spot closing of 6,338.95, while Nifty February 2014 futures ended at 6390.55 at a premium of 51.60 points over spot closing. Nifty January futures saw contraction of 0.14 million (mn) units taking the total outstanding open interest (OI) to 17.51 mn units. The near month January 2014 derivatives contract will expire on January 30, 2014.

From the most active contracts, Tata Motors January 2014 futures were at a premium of 0.40 points at 385.90 compared with spot closing of 385.50. The number of contracts traded was 9,543.  

Tata Steel January 2014 futures traded at a premium of 0.90 points at 393.75 compared with spot closing of 392.85. The number of contracts traded was 13,664.

Reliance Industries January 2014 futures were at a premium of 5.95 points at 873.95 compared with spot closing of 868.00. The number of contracts traded was 15,316. 

HDFC Bank January 2014 futures traded at a premium of 3.65 points at 679.65 compared with spot closing of 676.00. The number of contracts traded was 9,712.

ICICI Bank January 2014 futures were at a premium of 4.90 points at 1088.90 compared with spot closing of 1084.00. The number of contracts traded was 19,043.  Among Nifty calls, 6,500 SP from the January month expiry was the most active call with an addition of 0.36 million in open interest.

Among Nifty puts, 6,200 SP from the January month expiry was the most active put with  contraction of 0.11 million open interests.

The maximum OI outstanding for Calls was at 6,500 SP (5.08 mn) and that for Puts was at 6,200 SP (6.73 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6363.45 -- Pivot Point 6325.45 - Support -6300.95.

The Nifty Put Call Ratio (PCR) OI wise, stood at 1.28 for January month contract. The top five scrips with highest PCR on OI were DR Reddy 2.97, Infosys 2.67, HCL Tech 2.06, Auro Pharma 1.70 and HDFC 1.61.

Among most active underlying, SBI witnessed contraction of 0.09 million of Open Interest in the January month futures contract followed by Infosys witnessed contraction of 0.08 million of Open Interest in the January month contract; Reliance Industries witnessed contraction of 0.48 million of Open Interest in the January month futures. United Spirits witnessed contraction of 0.85 million of Open Interest in the January month contract and TCS witnessed an addition of 0.01 million in Open Interest in the near month futures contract.