Nifty snaps 5-day losing streak ends above 6,050 levels

Snapping five days of continuous sell off, Nifty kick-started the new F&O series on a positive note, with market participants hunting for oversold but fundamentally strong bargains. Investors’ sentiments got some support as the finance ministry underscored that the economy was well prepared to deal with the US Fed tapering programme. Meanwhile, bank stocks remained on buyers’ radar after the Reserve Bank of India (RBI) on January 30, 2014 laid out a road map to deal with a surge in bad loans in the banking system. On the global front, the US markets rebounded in last session and the major indices recovered on getting report that despite slowing, US economic growth matched estimates. With most of the markets in the region close for Lunar New Year holiday except the Japanese Nikkei, which reversing all its gains, was trading in the red despite reporting some strong earnings. However, cautiousness crept on street in late morning, as RBI Governor Raghuram Rajan warned of a breakdown in global policy coordination after the Federal Reserve cut stimulus, further weakening the emerging-market currencies. The investors also remained on sidelines ahead of fiscal deficit data for the April-December period and first revised GDP data for the fiscal year that ended in March 2013, scheduled to be announced later in the day. In the last leg of trade, Nifty managed to end higher, albeit with slender gains, above the crucial 6,050 levels. Nevertheless, the session clearly belonged to broader indices, which went home with broader gains of over a percent. For the week, Nifty plunged in the range of 2.5-3% and CNX Midcap ended with a cut of over a 1.5%.

Meanwhile, sectoral indices on the NSE made a positive closing. CNX Auto down by 0.23 were remained the top losers in the trade. While, CNX Media up by 2.82%, CNX PSU Bank up by 2.29%, CNX Realty up by 2.01% , CNX Metal up by 1.23% and CNX Infra up by 1.21% remained the gainer in the trade.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, up by 2.49% and reached 16.82.

Nifty February 2014 futures closed at 6112.00 on Friday at a premium of 22.50 points over spot closing of 6,089.50, while Nifty March 2014 futures ended at 6148.35 at a premium of 58.85 points over spot closing. Nifty February futures saw an addition of 0.27 million (mn) units taking the total outstanding open interest (OI) to 16.22 mn units. The near month February 2014 derivatives contract will expire on February 26, 2014.

From the most active contracts, Reliance Communications February 2014 futures were at a premium of 0.60 points at 123.40 compared with spot closing of 122.80. The number of contracts traded was 12,584. 

Tata Motors February 2014 futures were at a premium of 1.40 points at 351.35 compared with spot closing of 349.95. The number of contracts traded was 14,786. 

Reliance Industries February 2014 futures were at a premium of 5.25 points at 835.80 compared with spot closing of 830.55. The number of contracts traded was 11,348. 

Aurobindo Pharma February 2014 futures traded at a premium of 2.00 points at 472.60 compared with spot closing of 470.60. The number of contracts traded was 12,848.

ICICI Bank February 2014 futures were at a premium of 5.50 points at 994.85 compared with spot closing of 989.35. The number of contracts traded was 17,794.    Among Nifty calls, 6,300 SP from the February month expiry was the most active call with an addition of 0.08 million in open interest.

Among Nifty puts, 6,000 SP from the February month expiry was the most active put with  an addition of 0.95 million open interests.

The maximum OI outstanding for Calls was at 6,300 SP (3.16 mn) and that for Puts was at 6,000 SP (5.75 mn). The respective Support and Resistance levels of Nifty are: Resistance 6102.45 -- Pivot Point 6084.9 - Support- 6071.95.

The Nifty Put Call Ratio (PCR) OI wise, finally stood at 1.34 for January month contract. The top five scrips with highest PCR on OI were PNB 1.48, Cairn 1.38, Infosys 1.20, Orient Bank 1.15 and HCL Tech 1.09.

Among most active underlying, Reliance Industries witnessed addition of 0.12 million of Open Interest in the January month futures contract, followed by United Spirits witnessing contraction of 0.05 million of Open Interest in the January month contract; SBI witnessed  an addition of 0.26 million of Open Interest in the January month futures. ICICI Bank witnessed contraction of 1.06 million of Open Interest in the January month contract and TCS witnessed contraction of 1.84 million in Open Interest in the expiring January month’s future contract.