Nifty end above 6,150 levels on sustained demand from foreign investors

Nifty recouped morning losses and provisionally ended above 6,150 levels on Monday driven by sustained demand from foreign investors. On the global front, European shares were trading weak in early trades after discouraging outlook for 2014 by German auto major Volkswagen and tracking weakness in China's stocks. Asian markets too ended lower led by Hong Kong and Chinese indices which fell around a percent with property stocks losing the most amid talk that raised concerns banks have halted extending credit to real estate firms. Meanwhile, the Nikkei ended lower amid a volatile trading session on the back of a stronger yen.

Back home, Nifty made opening in the red in early deals on Monday, tracking weak Asian cues. some cautiousness crept in, after the global rating agency Moody’s indicated that forthcoming elections will delay the reform process and hurt growth, it also said that it expects growth to pick up to only 5.5 per cent in FY15. The agency also gave a negative outlook for non-financial corporates in 2014 on weak economy, political uncertainty and effects of the tapering by US Fed. There was also some concern ahead of the December quarter gross domestic product (GDP) reading on Friday, which will be closely watched by the market to gauge whether the decline in economic growth has stemmed.

But sentiments took U-turn in noon trade as some support came in as data showing that foreign funds remained buyers of Indian stocks on February 21 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 603.41 crore on Friday, as per provisional data from the stock exchanges. Sentiments also got some boost with Prime Minister’s Economic Advisory Council (PMEAC) Chairman C Rangarajan’s statement that India's Current Account Deficit (CAD) is expected to be around two percent of GDP during the current fiscal on the back of slackening imports and increased shipments. Meanwhile, RBI Governor Raghuram Rajan has said that the central banks of developed nations must also keep in mind emerging nations while framing monetary policies, though he asserted that India is well placed to weather financial crisis.

In last leg of trade, market sentiments got boosted by appreciation in Indian rupee which extended their gains and was trading higher at Rs 61.98 at the time of equity market closing as against the US dollar compared to its previous close of Rs 62.12. On the sectoral front, Capital Goods sector remained the top gainer led by L&T which ended higher by nearly 3%, after the company received Foreign Investment Promotion Board (FIPB) approval for foreign direct investment (FDI) in L&T Infrastructure Development Projects (L&T IDPL).

Meanwhile, sectoral indices on the NSE made positive closing. CNX Media down by 1.28%, CNX Metal down by 0.78% , CNX PSE down by 0.72% , CNX Commodities down by 0.67% and CNX IT down by 0.33%  were remained the top losers in the trade. While, CNX Pharma up by 1.28%, CNX Bank up by 1.22%, CNX Finance up by 1.08%, and CNX PSU Bank up by 0.80% remained the gainers in the trade.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, up by 2.26% and reached 14.3575. The 50-share CNX Nifty increased by 30.65 points or 0.50% to settle at 6,186.10.

Nifty February 2014 futures closed at 6193.20 on Monday at a premium of 7.10 points over spot closing of 6,186.10, while Nifty March 2014 futures ended at 6228.65 at a premium of 42.55 points over spot closing. Nifty February futures saw contraction of 1.59 million (mn) units, taking the total outstanding open interest (OI) to 12.37 mn units. The near month February 2014 derivatives contract will expire on February 26, 2014.

From the most active contracts, Reliance Communications February 2014 futures were trading flat compared with spot closing of 111.65.The number of contracts traded was 16,012. 

Tata Motors February 2014 futures were at a premium of 0.95 points at 397.50 compared with spot closing of 396.55. The number of contracts traded was 15,907. 

Reliance Industries February 2014 futures traded at a premium of 0.15 points at 813.05 compared with spot closing of 812.90. The number of contracts traded was 19,539.

ICICI Bank February 2014 futures were at a premium of 1.85 points at 1038.15 compared with spot closing of 1036.30. The number of contracts traded was 21,566.

Larsen & Toubro February 2014 futures were at a discount of 0.10 points at 1082.40 compared with spot closing of 1082.50. The number of contracts traded was 15,116.   Among Nifty calls, 6,200 SP from the February month expiry was the most active call with marginal contraction in open interest.

Among Nifty puts, 6,000 SP from the February month expiry was the most active put with contraction of 0.51 million open interests.

The maximum OI outstanding for Calls was at 6,200 SP (4.65 mn) and that for Puts was at 6,000 SP (10.28mn).

The respective Support and Resistance levels of Nifty are: Resistance 6208.37-- Pivot Point 6169.58 - Support- 6147.32.

The Nifty Put Call Ratio (PCR) OI wise, finally stood at 1.67 for February month contract. The top five scrips with highest PCR on OI were DR Reddy 2.33, Axis Bank 2.24, Adani Ports 1.54, HCL Tech 1.47, and PFC 1.39.

Among most active underlying, State Bank of India witnessed contraction of 2.04 million of Open Interest in the February month futures contract, followed by Reliance Industries witnessing contraction of 2.64 million of Open Interest in the February month contract; United Spirits witnessed an contraction of 1.22 million of Open Interest in the February month futures. TCS witnessed contraction of 0.92 million of Open Interest in the February month contract and ICICI Bank witnessed contraction of 1.21 million in Open Interest in the expiring February month’s future contract.