Banking stocks lift Nifty above 6100 levels

Nifty rallied for the third consecutive session on Tuesday on account of buying in banking sector. On the global front, Asian stocks rose, with the regional benchmark index poised for a three-week high, after the Bank of Japan maintained unprecedented asset purchases and boosted lending programs. On the flip side, in the European region, German stocks outperformed regional peers in cautious trade early on Tuesday ahead of data expected to show improved sentiment over Europe's biggest economy, while top European shares edged off three-week highs.

Back home, Nifty extended gains in morning with traders rejoicing the interim budget announcements made yesterday by Finance Minister P Chidambaram. Sentiments also remained upbeat on report that the FIIs bought shares worth a net Rs 522.82 crore on Monday, 17 February 2014, as per provisional data from the stock exchanges. The maximum gain was seen in the rate sensitives like banking and auto after the budget announcements and as the Finance Minister said that Reserve Bank of India (RBI) should strike a balance between price stability and growth when announcing its monetary policy. However, he also dismissed arguments that there was a contradiction between the stance of the government and the Reserve Bank of India on the growth versus price stability issue but asserted that an elected government has the responsibility of charting out the pace of growth.

The recoiling European markets too were unable to deter the domestic market from inching higher and though the street gave up some gains in second half, they managed to post decent gains for the day. The markets gave a thumbs-up to the interim budget and all the sectors that directly got any advantage or were associated with budget proposals gained substantially. Banking was the top gainer for the day, up by over two percent on the NSE, mainly led by the gains in private sector banks. Separately, the metal stocks remained in upbeat mood since morning on value-buying, as the excise reduction in auto will impact the steel sector positively and also as investors bet on higher global prices with a spurt in buying in China. However, the defensive FMCG sector remained under pressure since beginning and ended as the laggard on the NSE. The IT and Tech sector stocks too came under pressure in final hours, as the rupee depreciated on pent-up dollar demand due to extended weakened in the US markets.

Meanwhile, sectoral indices on the NSE made positive closing.  CNX FMCG down by 0.39% and CNX PSE down by 0.18% were remained the top losers in the trade. While, CNX Finance up by 2.53%, CNX Bank up by 2.41%, CNX PSU Bank up by 1.74%, CNX Infra up by 1.35% and CNX Service up by 1.33% remained the gainers in the trade.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down by 2.65% and reached 15.41. The 50-share CNX Nifty increased by 53.80 points or 0.89% to settle at 6,127.10.

Nifty February 2014 futures closed at 6138.8 on Tuesday at a premium of 11.7 points over spot closing of 6,127.10, while Nifty March 2014 futures ended at 6170.05 at a premium of 42.95 points over spot closing. Nifty February futures saw contraction of 0.57 million (mn) units taking the total outstanding open interest (OI) to 15.68 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 1.75 points at 392.75 compared with spot closing of 391.00. The number of contracts traded was 11,774. 

Yes Bank February 2014 futures were at a premium of 1.6 points at 308.6 compared with spot closing of 307.00. The number of contracts traded was 11,138. 

Reliance Industries February 2014 futures traded at a premium of 3.00 points at 815.3 compared with spot closing of 812.30. The number of contracts traded was 11,785.

Tata Steel February 2014 futures were at a discount of 0.25 points at 380.45 compared with spot closing of 380.70. The number of contracts traded was 11,360.

SBI February 2014 futures were at a premium of 6.35 points at 1503.65 compared with spot closing of 1,497.30. The number of contracts traded was 38,986.

Among Nifty calls, 6,200 SP from the February month expiry was the most active call with contraction of 0.72 million in open interest.

Among Nifty puts, 6,000 SP from the February month expiry was the most active put with an addition of 0.89 million open interests.

The maximum OI outstanding for Calls was at 6,200 SP (5.83 mn) and that for Puts was at 6,000 SP (10.91 mn).The respective Support and Resistance levels of Nifty are: Resistance 6156.93-- Pivot Point 6111.87- Support- 6082.03.

The Nifty Put Call Ratio (PCR) OI wise, finally stood at 1.42 for February month contract. The top five scrips with highest PCR on OI were Jindal Steel 1.42, HCL Tech 1.37, M&M 1.28, Auro Pharma 1.19 and Tata Motors 1.15.

Among most active underlying, State Bank of India witnessed contraction of 0.44 million of Open Interest in the February month futures contract, followed by United Spirits witnessing  contraction  of 0.35 million of Open Interest in the February month contract; Reliance Industries witnessed an addition  of 0.05 million of Open Interest in the February month futures. TCS witnessed contraction of 0.05 million of Open Interest in the February month contract and ICICI Bank witnessed contraction of 0.25 million in Open Interest in the expiring February month’s future contract.