Nifty ends on flat note; shrugs off repo rate hike by RBI

Indian equity benchmark, Nifty, shrugging off the surprise move by the RBI which hiked the repo rate by 25 bps to 8%, ended the volatile session on a flat note on the back of buying witnessed in the late afternoon session. On global front, Asian markets ended mixed on Tuesday amid rising concerns over the growth of emerging economies due to the US Fed tapering programme.  While, European shares bounced back from near one-month lows, helped by a rise in Siemens after the German engineer posted higher first quarter profits.

Back home, Nifty made a positive start as investors’ sentiments got some supports after the government’s statement that country's economic fundamentals were very strong with the country’s current account deficit (CAD) was expected to be below $50 billion and foreign exchange reserve at an all time high level. However, market paired all early gains in afternoon session after the apex bank hiked key policy rates in order to tame rising inflation. Selling was witnessed in banking stock with some major private sector banking stocks such as Axis Bank and HDFC Bank closed down over 0.60%. Meanwhile, in the late afternoon session, market recovered losses on the back of buying in metal, realty and FMCG stock. Finally, Nifty ended the session with marginal losses of 9 points.

Meanwhile, sectoral indices on the NSE made a mixed closing. CNX Metal up by 1.83%, CNX Realty up by 1.32%, CNX FMCG up by 0.43%, CNX Auto up by 0.23% and CNX Energy up by 0.01% remained the gainers in the trade. While, CNX MNC down 1.05%, CNX IT down 1.01%, CNX Pharma down 1.00%, CNX service down 0.58% and CNX PSU Bank down 0.16% remained the top losers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down by 5.09% and reached 17.72.

Nifty January 2014 futures closed at 6139.40 on Tuesday at a premium of 13.15 points over spot closing of 6,126.25, while Nifty February 2014 futures ended at 6175.85 at a premium of 49.60 points over spot closing. Nifty January futures saw contraction of 1.85 million (mn) units taking the total outstanding open interest (OI) to 10.80 mn units. The near month January 2014 derivatives contract will expire on January 30, 2014.

From the most active contracts, BHEL January 2014 futures were at a premium of 0.05 points at 164.65 compared with spot closing of 164.60. The number of contracts traded was 17,258. 

HDFC Bank January 2014 futures traded at a discount of 1.00 points at 644.00 compared with spot closing of 645.00. The number of contracts traded was 22,260.

Reliance Industries January 2014 futures were at a premium of 1.25 points at 846.95 compared with spot closing of 845.70. The number of contracts traded was 17,974. 

ICICI Bank January 2014 futures were at a discount of 2.85 points at 1020.15 compared with spot closing of 1023.00. The number of contracts traded was 35,479. 

SBI January 2014 futures traded at a discount of 1.50 points at 1600.30 compared with spot closing of 1601.80. The number of contracts traded was 52,150.

Among Nifty calls, 6,100 SP from the January month expiry was the most active call with an addition of 1.28 million in open interest.

Among Nifty puts, 6,000 SP from the January month expiry was the most active put with  an addition of 0.72 million open interests.

The maximum OI outstanding for Calls was at 6,300 SP (5.62 mn) and that for Puts was at 6,000 SP (4.96 mn). The respective Support and Resistance levels of Nifty are: Resistance 6164.58 -- Pivot Point 6125.27 - Support- 6086.93.

The Nifty Put Call Ratio (PCR) OI wise, stood at 0.79 for January month contract. The top five scrips with highest PCR on OI were DR Reddy 3.46, Infosys 2.04, HCL Tech 1.96, HDFC 1.80, and Apollo Tyre 1.40.

Among most active underlying, Maruti Suzuki witnessed contraction of 0.88 million of Open Interest in the January month futures contract followed by SBI witnessing contraction of 1.43 million of Open Interest in the January month contract; Infosys witnessed contraction of 0.41 million of Open Interest in the January month futures. Axis Bank witnessed contraction of 0.74 million of Open Interest in the January month contract and ICICI Bank witnessed contraction of 0.14 million in Open Interest in the near month futures contract.