Nifty closes above 6,000 levels on back of value-buying

Nifty, after rebounding from nearly four-month low in the previous session, amid high volatility managed to end marginally higher above 6,000 levels today on value buying by investors at lower levels. However, further gains were capped after foreign funds turned net sellers in equities. On the global front, Firm opening in European markets too aided the sentiments with CAC, DAX and FTSE all trading higher in early deals on the back of good economic data. Asian markets ended mostly in the green, with Japanese index ending higher by over a percentage point showing good momentum on getting some good earnings announcements. 

Back home, Nifty opened in the red with a cut of over half a percent, breach its crucial 6,000 level amid lingering worries about the outlook for the global economy on the back of recent weak data from the U.S. and China. Sentiments also remained dampened on report that foreign institutional investors (FIIs) sold shares worth a net Rs 1234.02 crore on February 4, 2014, as per provisional data from the stock exchanges. The index staged a smart recovery in second half of the session and turned green, paring all of their initial losses, as some support came from Reserve Bank of India’s Governor Raghuram Rajan’s statement that the country is better prepared for ‘any eventuality’ in the economy now than it was six months ago. Sentiments also got some support from currency front where Indian rupee was trading strong against dollar on the back of appreciation of other currencies against the dollar. The rupee was at Rs 62.42 at the time of equity markets closing as compared with previous close of Rs 62.54 per dollar.

Meanwhile, sectoral indices on the NSE made a positive closing. CNX FMCG down by 1.01% and CNX Media down by 0.36% were remained the top losers in the trade. While, CNX Metal up by 1.82%, CNX Realty up by 1.74%, CNX Auto up by 1.69%, CNX IT up by 1.11%, and CNX PSE up by 1.11% remained the gainer in the trade.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, up by 1.28% and reached 18.93.The 50-share CNX Nifty increased by 21.50 points or 0.36% to settle at 6,022.40.

Nifty February 2014 futures closed at 6048.95 on Wednesday at a premium of 26.55 points over spot closing of 6,022.40, while Nifty March 2014 futures ended at 6084.90 at a premium of 62.50 points over spot closing. Nifty February futures saw an addition of 0.13 million (mn) units taking the total outstanding open interest (OI) to 16.38 mn units. The near month February 2014 derivatives contract will expire on February 26, 2014.

From the most active contracts, BHEL February 2014 futures were at a discount of 2.95 points at 157.45 compared with spot closing of 160.40. The number of contracts traded was 13,241. 

Tata Motors February 2014 futures were at a premium of 2.10 points at 357.10 compared with spot closing of 355.00. The number of contracts traded was 17,649. 

Tata Steel February 2014 futures traded at a premium of 1.25 points at 361.75 compared with spot closing of 360.50. The number of contracts traded was 15,886.

Reliance Industries February 2014 futures were at a premium of 5.55 points at 821.85 compared with spot closing of 816.30. The number of contracts traded was 17,574. 

Ranbaxy Laboratories February 2014 futures were at a premium of 2.10 points at 342.55 compared with spot closing of 340.45. The number of contracts traded was 23,197.    

Among Nifty calls, 6,200 SP from the February month expiry was the most active call with an addition of 0.09 million in open interest.

Among Nifty puts, 6,000 SP from the February month expiry was the most active put with an addition of 0.58 million open interests.

The maximum OI outstanding for Calls was at 6,200 SP (5.04 mn) and that for Puts was at 6,000 SP (7.57 mn).The respective Support and Resistance levels of Nifty are: Resistance 6034.7 -- Pivot Point 5984 - Support- 5950.2.

The Nifty Put Call Ratio (PCR) OI wise, finally stood at 1.34 for February month contract. The top five scrips with highest PCR on OI were Grasim 1.33, PNB 1.27, Cairn 1.11, IOC 1.03 and Kotak Bank 0.97.

Among most active underlying, State Bank of India witnessed addition of 0.10 million of Open Interest in the February month futures contract, followed by Reliance Industries witnessing an addition of 0.12 million of Open Interest in the February month contract; United Spirits witnessed  contraction of 0.12 million of Open Interest in the February month futures. ICICI Bank witnessed an addition of 0.10 million of Open Interest in the February month contract and TCS witnessed contraction of 0.04 million in Open Interest in the expiring February month’s future contract.