Nifty closes at 6200 in volatile trade

Nifty managed to close bang on its crucial psychological level of 6200 on penultimate day of February F&O expiry on Tuesday gaining for the second consecutive day in this week. Despite persistant volatility the index remained in a tight range of 50 points. The index after making positive opening slipped into red for a couple of time and it looked that position unwinding may lead the market lower for the day but bounce back was instant and the index recovered from their lows on short covering to end higher by around a quarter percent.

On the global front, supportive cues from US markets provided some support to local markets and sentiments remained up-beat on hopes that Fed Chair Janet Yellen may not continue tapering in the face of the weak economic data. Asian markets ended mixed with Chinese market ending lower by over two percent on report of drop in property sales last week, while the Japanese Nikkei ended higher by around one and a half percent on weakening yen. However, disappointing start of European markets took their toll on domestic sentiments and capped the gains on the up-side. 

Back home Nifty extending their previous session’s rally, made a gap up opening on Tuesday bastions, buoyed by firm global cues. Sentiments remained up-beat on the back of latest survey of National Council of Applied Economic Research (NCAER), which said that after a slide in the second quarter of the current fiscal, higher exports, enhanced farm produce and moderation in inflation improved business confidence during the October-December period. The Business Confidence Index (BCI) rose by about 21.8 percent to 122.3 points from 100.4 in July-September quarter, 2013-14. Also, the Reserve Bank of India (RBI) Governor Raghuram Rajan has said that the central bank’s focus is to bring down inflation to boost investor confidence.  Further, Market participants’ sentiments got boost as the rupee appreciated against the US dollar in early trade on the Interbank Foreign Exchange market on increased foreign fund inflows amid a higher opening in the domestic equity market. Some support to the market also came from report that the Overseas investors bought Indian shares worth Rs 267 crore ($43.03 million) on Monday, provisional exchange data showed. 

Gains on up-side remained capped in second half as investors offloaded positions in metal stocks tailing the weakness in the Chinese market where the currency tumbled the most in more than a year on speculation the central bank wanted to end currency’s steady appreciation. Market participants also turned cautious as international rating agency Moody’s expects only marginal increase in Indian economic growth at 5.5 percent during FY15 citing that the forthcoming elections will delay the reform process and hurt growth.

Meanwhile, sectoral indices on the NSE made positive closing. CNX Metal down by 1.81%, CNX Commodities down by 0.50% , CNX PSE down by 0.39% , CNX Energy down by 0.33% and CNX PSU Bank down by 0.22%  were remained the top losers in the trade. While, CNX IT up by 0.95%, CNX Media up by 0.63%, CNX Auto up by 0.60%, and CNX FMCG up by 0.35% remained the gainers in the trade.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down by 2.83% and reached 13.9500. The 50-share CNX Nifty increased by 13.95 points or 0.23% to settle at 6,200.05.

Nifty February 2014 futures closed at 6209.05 on Tuesday at a premium of 9.00 points over spot closing of 6,200.05, while Nifty March 2014 futures ended at 6244.05 at a premium of 44.00 points over spot closing. Nifty February futures saw contraction of 2.60 million (mn) units, taking the total outstanding open interest (OI) to 9.77 mn units. The near month February 2014 derivatives contract will expire on February 26, 2014.

From the most active contracts, BHEL February 2014 futures were trading flat compared with spot closing of 159.50.The number of contracts traded was 14,997. 

Reliance Industries February 2014 futures traded at a premium of 2.30 points at 811.75 compared with spot closing of 809.45. The number of contracts traded was 23,410.

Tata Steel February 2014 futures were at a premium of 1.15 points at 361.25 compared with spot closing of 360.10. The number of contracts traded was 14,718. 

ICICI Bank February 2014 futures were at a premium of 2.95 points at 1032.75 compared with spot closing of 1029.80. The number of contracts traded was 21,628.

SBI February 2014 futures were at a premium of 3.20 points at 1508.00 compared with spot closing of 1504.80. The number of contracts traded was 28,797.  Among Nifty calls, 6,300 SP from the February month expiry was the most active call with contraction of 0.11million open interest.

Among Nifty puts, 6,000 SP from the February month expiry was the most active put with contraction of 1.05 million open interests.

The maximum OI outstanding for Calls was at 6,300 SP (4.53 mn) and that for Puts was at 6,000 SP (9.23mn).

The respective Support and Resistance levels of Nifty are: Resistance 6219.07-- Pivot Point 6197.83 - Support- 6178.82.

The Nifty Put Call Ratio (PCR) OI wise, finally stood at 1.70 for February month contract. The top five scrips with highest PCR on OI were DR Reddy 2.26, Axis Bank 2.23, Ultra Cement Company 1.65, ACC 1.59, and HCL Tech 1.58.

Among most active underlying, State Bank of India witnessed contraction of 1.10 million of Open Interest in the February month futures contract, followed by Reliance Industries witnessing contraction of 3.37 million of Open Interest in the February month contract; United Spirits witnessed an contraction of 1.28 million of Open Interest in the February month futures. TCS witnessed contraction of 0.82million of Open Interest in the February month contract and ICICI Bank witnessed contraction of 1.55 million in Open Interest in the expiring February month’s future contract.