Nifty stages strong comeback in last hour of trade; closes over a percent higher from day's low

Nifty staged a strong comeback in the last hour of trade on the back of short coverings ahead of the interim Union Budget. On the global front, Asian stock markets saw broad gains on Friday, making a strong finish to the week as they took their lead from Wall Street, which shrugged off lack-lustre US economic data. Additionally, European shares rose early on Friday, up for the seventh time in eight sessions, as data showing better-than-expected economic growth in Germany and France fuelled expectations of a rebound in corporate profits in Europe this year 

Back home, after a positive start, Nifty failed to hold their gains and slipped in red in early deal as there was some concern with a United Nations report that government may not achieve its fiscal deficit target of 4.8 per cent for the year. However, investor’s sentiments got boosted mid morning as the rupee appreciated against the US dollar. Weak US retail sales data has raised some investors' expectations for a slower reduction in the US Federal Reserve's monetary policy stimulus programme.

During early noon trades, there was spurt in the market after the Whole Sale Price index inflation, India’s main inflation gauge eased to eight-month low at 5.05% in January, as compared to 6.16% in December and 7.31% during the corresponding month of the previous year. However, the enthusiasm did not last long as investors came to terms with higher Core CPI data, which moved up at 3% as compared to 2.8% in December. It was the closing day of official earnings season and some results-disappointment too weighed on the sentiments. However, there was dramatic turnaround in the markets in the final hour of trade, though there was sudden across the board buying at lower levels and banking along with tech stocks moved higher after SBI chief clarified that the PAT decline was mainly due to one-time pension provisions and MTM losses. Telecom stocks like, Idea Cellular and Bharti Airtel gained on retaining their spectrum after a mobile unit of Reliance Industries did not bid aggressively and was unable to win any spectrum in the premium 900 megahertz in an auction, easing the competition in the sector.

Meanwhile, sectoral indices on the NSE made a negative closing. CNX Media down by 1.17%, CNX PSU Bank down by 0.42% and CNX Pharma down by 0.15% were remained the top losers in the trade. While, CNX IT up by 1.38%, CNX Energy up by 1.28%, CNX Service up by  0.95%, CNX PSE up by 0.78% and CNX Bank up by 0.67% remained the gainers in the trade.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down by 6.40% and reached 16.66.The 50-share CNX Nifty increased by 47.25 points or 0.79% to settle at 6,048.35.

Nifty February 2014 futures closed at 6058.00 on Friday at a premium of 9.65 points over spot closing of 6,048.35, while Nifty March 2014 futures ended at 6091.70 at a premium of 43.35 points over spot closing. Nifty February futures saw contraction of 0.45 million (mn) units taking the total outstanding open interest (OI) to 16.20 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 discount of 0.35 points at 389.30 compared with spot closing of 389.65. The number of contracts traded was 18,774. 

Reliance Industries February 2014 futures were at a premium of 0.55 points at 822.45 compared with spot closing of 821.90. The number of contracts traded was 14,005. 

Bharti Airtel February 2014 futures traded at a premium of 0.85 points at 306.65 compared with spot closing of 305.80. The number of contracts traded was 12,866.

Tata Steel February 2014 futures were at a premium of 0.30 points at 372.25 compared with spot closing of 371.95. The number of contracts traded was 17,786. 

SBI February 2014 futures were at a premium of 7.90 points at 1480.90 compared with spot closing of 1473.00. The number of contracts traded was 111,267. 

Among Nifty calls, 6,200 SP from the February month expiry was the most active call with contraction of 0.31 million in open interest.

Among Nifty puts, 6,000 SP from the February month expiry was the most active put with  contraction of 0.78 million open interests.

The maximum OI outstanding for Calls was at 6,200 SP (6.32 mn) and that for Puts was at 6,000 SP (8.71 mn).The respective Support and Resistance levels of Nifty are: Resistance 6074.97-- Pivot Point 6029.78 - Support- 6003.17.

The Nifty Put Call Ratio (PCR) OI wise, finally stood at 1.24 for February month contract. The top five scrips with highest PCR on OI were HCL Tech 1.47, Tata Motors 1.08, Auro Pharma 1.05, PNB 1.02 and IOC 0.94.

Among most active underlying, State Bank of India witnessed an addition of 0.17 million of Open Interest in the February month futures contract, followed by United Spirits witnessing  contraction  of 0.12 million of Open Interest in the February month contract; Reliance Industries witnessed contraction of 0.51 million of Open Interest in the February month futures. TCS witnessed contraction of 0.14 million of Open Interest in the February month contract and ICICI Bank witnessed contraction of 0.05 million in Open Interest in the expiring February month’s future contract.