Nifty closes above 6150 levels on back of positive US data

Nifty closes above 6150 levels recouping all losses from the previous session to end the week on a high note. A recovery in global markets allowed blue chips to recover from falls in the previous session. On the global front, a survey showing brisk US manufacturing activity gave Asian stock markets a lift on Friday and bolstered the dollar. However, underlying concerns about China's economic growth could keep investors from rushing to buy some emerging market assets. Additionally, European shares climbed higher on Friday, with France's CAC 40 hitting a 5-1/2-year peak, as investors took their lead from stronger equities on Wall Street and in Asia following robust US factory data.

Back home, Nifty made a decent start on Friday. The mood of the domestic markets got a boost with the surge in the US bourses after preliminary manufacturing index in the US expanded at the fastest pace in almost four years in February. Index after surging to higher levels early morning, kept gyrating within those range till the end of the session. The rally was supported by the blue-chips and the broader indices too equally participated in the upmove. Traders were encouraged by the International Monetary Fund (IMF) revising its previous forecast of GDP growth upwards to a 4.6 per cent in FY14 and improving to 5.4 per cent in FY15. However, it recommended India to go for more interest rate hikes to tackle high inflation and its expectations.

In non sectoral gauges the Cement sector stocks were in most jubilant mood on some reports of rise in cement prices across the region. Ambuja Cements surged by 6.16%, ACC was up by 6%, and UltraTech Cements gained 5.29%. On the other hand the telecom stocks remained in somber mood since beginning on some brokerage downgrade after the intense bidding in the recent 2G auction and after the Department of Telecom issued the much-awaited guidelines for merger and acquisition (M&A) in the industry. The operators have said that the clause that merged entity would need to pay the market price for the entire spectrum holding minus the entry fee already paid by the seller would increase M&A costs and potentially scuttle a lot of deals.

Bit of volatility emerged in last hour of trade as select traders adjusted their position ahead of the holiday truncated F&O expiry week, which led to index ending near day’s high point.

Meanwhile, sectoral indices on the NSE made negative closing. CNX Realty down by 0.16% with were remained the top osers in the trade. While, CNX Media up by 2.19% , CNX Commodities up by 1.57%, CNX FMCG up by 1.35% and CNX IT up by 1.30% remained the gainers in the trade.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down by 7.39% and reached 14.04. The 50-share CNX Nifty increased by 64.00 points or 1.05% to settle at 6,155.45.

Nifty February 2014 futures closed at 6163.95 on Friday at a premium of 8.50 points over spot closing of 6,155.45, while Nifty March 2014 futures ended at 6198.1 at a premium of 42.65 points over spot closing. Nifty February futures saw contraction of 0.90 million (mn) units, taking the total outstanding open interest (OI) to 13.97 mn units. The near month February 2014 derivatives contract will expire on February 26, 2014.

From the most active contracts, Rcom February 2014 futures were at a premium of 0.65 points at 111.95 compared with spot closing of 111.30.The number of contracts traded was 15,849. 

Reliance Industries February 2014 futures were at a premium of 2.1 points at 812.85 compared with spot closing of 810.75. The number of contracts traded was 13,845. 

ICICI Bank February 2014 futures traded at a premium of 0.90 points at 1026.8 compared with spot closing of 1,025.90. The number of contracts traded was 14,091.

SBI February 2014 futures were at a premium of 9.35 points at 1506.25 compared with spot closing of 1,496.90. The number of contracts traded was 40,259.

Axis Bank February 2014 futures were at a discount of 2.75 points at 1191.2 compared with spot closing of 1,193.95. The number of contracts traded was 18,044

Among Nifty calls, 6,200 SP from the February month expiry was the most active call with contraction of 0.34 million in open interest.

Among Nifty puts, 6,000 SP from the February month expiry was the most active put with contraction of 0.59 million open interests.

The maximum OI outstanding for Calls was at 6,200 SP (5.14 mn) and that for Puts was at 6,000 SP (10.80 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6174.07-- Pivot Point 6141.03 - Support- 6122.42.

The Nifty Put Call Ratio (PCR) OI wise, finally stood at 1.57 for February month contract. The top five scrips with highest PCR on OI were DR Reddy 1.82, Axis Bank 1.54, Ultra Cement 1.49, Adani Ports 1.43 and HCL Tech 1.39.

Among most active underlying, State Bank of India witnessed contraction of 1.84 million of Open Interest in the February month futures contract, followed by Reliance Industries witnessing contraction of 0.82 million of Open Interest in the February month contract; United Spirits witnessed an contraction of 1.12 million of Open Interest in the February month futures. TCS witnessed contraction of 0.36 million of Open Interest in the February month contract and ICICI Bank witnessed contractionof 0.86 million in Open Interest in the expiring February month’s future contract.