Nifty rallies to new levels; closes just short of 6650

Exuberant Nifty once again displayed an enthusiastic performance on Thursday, the day of expiry of March F&O series, extending its gains to close just short of the psychological level of 6,650 on the back of strong inflows from institutional investors. The rally was led by higher rollovers on absolute basis coupled with high roll cost, indicating market participants that were bullish for April series. Besides, the Reserve Bank of India in its policy review on April 1 is widely expected to keep rates unchanged. Investors also expect the forthcoming general elections would act as the next key catalyst for markets. Overseas investors have helped underpin gains, with net purchases in shares reaching $2.75 billion so far this month. After making a cautious start, index continued its northward journey and there appeared not even an iota of profit booking till noon, though some volatility was witnessed near the end of the trade where index lost some ground, it recovered soon and closed with respectable 40 points above the neutral line.

Meanwhile, sectoral indices on the NSE made positive closing. PSU Bank up by 3.34, CNX Energy up by 1.29%, CNX Realty up by 1.17%, CNX Finance up by 0.86% and CNX FMCG up by 0.86% remained the gainers in the trade. While, CNX Media down by 1.28%, CNX IT down by 0.06% and CNX Pharma down by 0.94% 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 3.41% and reached 18.3725. The 50-share CNX Nifty increased by 40.35 points or 0.61% to settle at 6,641.75.

Nifty April 2014 futures closed at 6,683 on Thursday at a premium of 41.25 points over spot closing of 6,641.75, while Nifty May 2014 futures ended at 6,716.20 at a premium of 74.45 points over spot closing. Nifty April futures saw an addition of 4.39 million (mn) units, taking the total outstanding open interest (OI) to 16.08 mn units. The near month April 2014 derivatives contract will expire on April 24, 2014.

From the most active contracts, HDFC Bank April 2014 futures were at a premium of 12.25 points at 757.30 compared with spot closing of 745.05. The number of contracts traded was 26,735.

State Bank of India April 2014 futures traded at a premium of 7.90 points at 1,850.90 compared with spot closing of 1,843.00. The number of contracts traded was 38,363.

ICICI Bank April 2014 futures traded at a premium of 9.05 points at 1,268.15 compared with spot closing of 1,259.10. The number of contracts traded was 27,715.

United Spirits April 2014 futures traded at a premium of 11.40 points at 2,671.40 compared with spot closing of 2,660.00. The number of contracts traded was 22,558.Among Nifty calls, 6,700 SP from the April month expiry was the most active call with an addition of 1.34 million open interest.

Among Nifty puts, 6,500 SP from the April month expiry was the most active put with an addition of 0.71 million open interest.

The maximum OI outstanding for Calls was at 6,700 SP (3.48 mn) and that for Puts was at 6,400 SP (2.86 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6677.3 -- Pivot Point 6638.4 - Support -- 6602.85.

The Nifty Put Call Ratio (PCR), finally stood at 0.99 for April month contract. The top five scrips with highest PCR on OI were Centurytex 2.14, Mcleodruss 1.50, ONGC 1.46, Ambuja Cement 1.45, and HDFC 1.27.

Among most active underlying, State Bank of India witnessed with contraction  of 0.68 million of Open Interest in the April month futures contract, followed by United Spirits  witnessing  contraction  of 1.21 million of Open Interest in the April month contract; Reliance Industries witnessed contraction of 2.14 million of Open Interest in the April month futures. HDFC Bank witnessed an addition of 5.78 million of Open Interest in the April month contract and TCS witnessed contraction of 0.71 million in Open Interest in the expiring April month's future contract