Nifty manages to keep head above water on Tuesday

Paring most of its initial gains, Nifty snapped Tuesday’s trade flat with positive bias. Buoyed by firm global cues, index made a gap-up opening and Nifty surpassed its crucial 6,550 level in early deals. However, the intra-day reversal which took place in the late hours of the trade, mainly washed away all initial gains, and slipped into red for a couple of times as bears and bulls tussled over market dominance.  Supportive cues from US and Asian markets too provided some support to local bourses and sentiments remained up-beat since beginning as investors breathed easy with ebbing Ukraine concerns over the situation in Crimea even as the region voted in favor of quitting Ukraine.  Sentiments also got some support after the investment banker Goldman Sachs upgraded Indian equities to “overweight” from “market-weight” and raised its target on Nifty to 7,600, citing reduced external vulnerabilities, including a narrowing current account deficit, and potential for gains ahead of elections that conclude in May.

However, disappointing cues from European market took their toll on domestic sentiments investors turned cautious and chose to take profits off the table, a day in late trade and dragged the frontline gauges below the psychological 6,550 levels

Meanwhile, sectoral indices on the NSE made positive closing. CNX PSU Bank up by 2.47%, CNX FMCG up by 1.93%, CNX MNC up by 1.80%, CNX Media up by 1.71% and CNX PSE up by 1.18% remained the gainers in the trade. While, CNX IT down by 0.79%, CNX Realty down by 0.62%, CNX Auto down by 0.11%, CNX Service down by 0.02% were remained the top losers in the trade.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, up by 4.13% and reached 17.1275. The 50-share CNX Nifty increased by 12.45 points or 0.19% to settle at 6,516.65.

Nifty March 2014 futures closed at 6,547.50 on Monday at a premium of 30.85 points over spot closing of 6,516.65, while Nifty April 2014 futures ended at 6594.70 at a premium of 78.05 points over spot closing. Nifty March futures saw addition of 0.28 million (mn) units, taking the total outstanding open interest (OI) to 19.66 mn units. The near month March 2014 derivatives contract will expire on March 27, 2014.

From the most active contracts, L&T Finance Holdings March 2014 futures were at a premium of 0.45 points at 73.95 compared with spot closing of 73.50. The number of contracts traded was 11,578.

Tata Motors March 2014 futures traded at a premium of 1.95 points at 383.45 compared with spot closing of 381.50. The number of contracts traded was 11,903.

Tata Steel March 2014 futures were at a premium of 1.05 points at 341.45 compared with spot closing of 340.40. The number of contracts traded was 13,258.

Reliance Industries March 2014 futures traded at a premium of 4.55 points at 899.05 compared with spot closing of 894.50. The number of contracts traded was 26,314.

Larsen & Toubro March 2014 futures traded at a premium of 7.80 points at 1247.45 compared with spot closing of 1239.65. The number of contracts traded was 10,959.

Among Nifty calls, 6,600 SP from the March month expiry was the most active call with an addition of 0.48 million open interest.

Among Nifty puts, 6,400 SP from the March month expiry was the most active put with marginal contraction in open interests.

The maximum OI outstanding for Calls was at 6,600 SP (5.18 mn) and that for Puts was at 6,400 SP (6.22 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6561.85 -- Pivot Point 6529.75 - Support -- 6484.55.

The Nifty Put Call Ratio (PCR), finally stood at 1.43 for March month contract. The top five scrips with highest PCR on OI were Ambuja Cement 1.71, HDFC 1.53, ITC 1.45, Hero Motoco 1.36 and Hindalco 1.33.

Among most active underlying, State Bank of India witnessed  contraction of 0.18 million of Open Interest in the March month futures contract, followed by Reliance Industries witnessing  contraction  of 0.67 million of Open Interest in the March month contract; United Spirits  witnessed an addition of 0.05 million of Open Interest in the March month futures. ICICI Bank witnessed an addition of 0.09 million of Open Interest in the March month contract and TCS witnessed an addition of 0.25 million in Open Interest in the expiring March month's future contract