Firm opening in European markets lift Nifty to end higher

Nifty recouped a lion's portion of intraday losses and regained psychological 6,000 mark as European stocks edged higher in early trade supported the sentiments with CAC, DAX and FTSE all trading higher in early deals, with corporate earnings updates supporting investor sentiments ahead of the release of monetary policy decisions from the Bank of England and the European Central Bank. Asian markets too ended in the green with investors indulging in some bargain hunting after recent steep losses.

Back home, buoyed by firm cues from Asian markets, Nifty extending its previous session's run, making a positive start in early morning deals on Thursday. Some support also came in from Finance Minister P Chidambaram’s statement that the country can grow at a sustained rate of 8-9 percent annually over the next 10-30 years. Some optimism also came on the buzz that the government allowing 26% foreign investment in activities related to insurance like broking, third party administrators and surveyors and permitted FIIs and NRIs to also invest in insurers within stipulated cap. Meanwhile, Activity in India's services sector improved marginally in January but still remained in the ‘contraction zone’ for the seventh month running. The HSBC Services Purchasing Managers’ Index (PMI) climbed to 48.3 in January from 46.7 in December. However, sudden bouts of profit booking dragged the index into the negative territory in late morning trade as investors turned cautious at higher levels with IT shares leading the decline after conservative guidance from Cognizant. Sentiments also got dampened on report that foreign institutional investors (FIIs) sold shares worth a net Rs 576.20 crore on February 5, 2014.

Index staged a smart bounce in last leg of trade after hitting the lowest point and recovered around a percentage point to finish in the positive territory with moderate gains. Gains in fast moving consumer goods stocks like ITC and HUL too supported the market up-move. Telecom stocks viz, Idea Cellular, Reliance Communication, Bharti Airtel  remained on buyers’ radar, as the third round of the telecom spectrum auction continued on a warm note on third day on February 5, 2014. Telecom companies bid aggressively for the efficient 900-MHz band available in Delhi, Mumbai and Kolkata circles. Select shipping stocks like, Global Offshore, Seamec and Dredging Corp edged higher, as the Cabinet Committee on Economic Affairs (CCEA) approved five port related projects involving atleast Rs 17,600 crore investments to increase the capacity of the major ports by 150.74 million tonnes per annum.

Meanwhile, sectoral indices on the NSE made a positive closing. CNX Realty down by 1.77%, CNX PSU Bank down by 1.07% , CNX Bank down by 0.26% , CNX IT down by 0.23%  and CNX Service down by 0.09% were remained the top losers in the trade. While, CNX FMCG up by 1.48%, CNX Metal up by 0.94%, CNX Auto up by 0.80%, CNX MNC up by 0.71%, and CNX PSE up by 0.43% remained the gainer in the trade.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, up by 0.05% and reached 18.94.The 50-share CNX Nifty increased by 13.90 points or 0.23% to settle at 6,036.30.

Nifty February 2014 futures closed at 6048.30 on Thursday at a premium of 12.00 points over spot closing of 6,036.30, while Nifty March 2014 futures ended at 6083.25 at a premium of 46.95 points over spot closing. Nifty February futures saw contraction of 0.34 million (mn) units taking the total outstanding open interest (OI) to 16.04 mn units. The near month February 2014 derivatives contract will expire on February 26, 2014.

From the most active contracts, Tata Motors February 2014 futures were at a premium of 0.65 points at 358.10 compared with spot closing of 357.45. The number of contracts traded was 14,874. 

Tata Steel February 2014 futures traded at a premium of 1.10 points at 362.60 compared with spot closing of 361.50. The number of contracts traded was 16,999.

Aurobindo Pharma February 2014 futures were at a premium of 0.35 points at 495.45 compared with spot closing of 495.10. The number of contracts traded was 16,434. 

Reliance Industries February 2014 futures were at a premium of 3.40 points at 819.30 compared with spot closing of 815.90. The number of contracts traded was 17,830. 

HDFC Bank February 2014 futures were at a discount of 2.75 points at 644.75 compared with spot closing of 647.50. The number of contracts traded was 14,543.  Among Nifty calls, 6,200 SP from the February month expiry was the most active call with an addition of 0.30 million in open interest.

Among Nifty puts, 6,000 SP from the February month expiry was the most active put with  contraction of 0.01 million open interests.

The maximum OI outstanding for Calls was at 6,200 SP (5.35 mn) and that for Puts was at 6,000 SP (7.55 mn).The respective Support and Resistance levels of Nifty are: Resistance 6067.97-- Pivot Point 6016.68 - Support- 5985.02.

The Nifty Put Call Ratio (PCR) OI wise, finally stood at 1.35 for February month contract. The top five scrips with highest PCR on OI were Cairn 1.39, Auro Pharma 1.35, Grasim 1.34, IOC 1.18 and PNB 1.12.

Among most active underlying, State Bank of India witnessed addition of 0.01 million of Open Interest in the February month futures contract, followed by Reliance Industries witnessing an addition of 0.04 million of Open Interest in the February month contract; United Spirits witnessed  addition of 0.06 million of Open Interest in the February month futures. ICICI Bank witnessed an addition of 0.09 million of Open Interest in the February month contract and TCS witnessed contraction of 0.10 million in Open Interest in the expiring February month’s future contract.