Nifty gains marginally ahead of RBI monetary policy review

Key share index -- S&P Nifty -- ended the range-bound trading session with marginal gains on Monday as investors turned cautious ahead of the Reserve Bank of India’s (RBI) fiscal year’s monetary policy review. Though, the global leads remained subdued as most of the Asian counters ended the trade in a negative terrain as investors cut their exposure to risky assets in response to fresh concerns over the euro zone debt crisis after Spanish bond yields soared. However, European shares edged higher in the trade, consolidating after recent falls as a strong start to the US earnings season offered some support even as investors remained cautious about the outlook for Spain ahead of a bond auction this week. Back home, the sentiments got support after headline inflation cooled marginally in March, leading to gains in rate- sensitive stocks like banks and automobiles.

Earlier, the benchmark made a sluggish start breaching its crucial 5,200 mark, tracking negative global cues; lower than expected Chinese Gross Domestic Product (GDP), Spain worries and weaker than expected US data weighed on global equities. Afterwards, the domestic market trimmed its initial losses and continued to trade near neutral lines as investors awaited headline inflation for the month of March. At the same time, the index traded between positive and negative terrain till late morning trade. But, once the inflation numbers for March came out, it triggered buying in rate sensitives like Auto and banking which helped the index to surpass sub 5,250 level. There were slight moderation in March WPI inflation to 6.89% v/s 6.95% in February while, the WPI rose a faster-than-expected in March from a year earlier, mainly driven by higher food prices. Investors started taking positions in interest rate sensitive like Auto, banking and realty stocks on hopes that RBI will announce 25 bps rate cut in its monetary policy review on April 17, 2012. In the mid noon trade market wiped out all its gains and turned red due to some selling witnessed in software space. CNX IT declined over half a percent after the IT bellwether reported disappointing fourth quarter earnings and offered lower dollar revenue and earnings per share (EPS) guidance for FY13. But, it was the final hour of trade where sentiments turned bullish and market regained its strength snapping the session with modest gains. Firm trade in European counters too aided the sentiments. 

Meanwhile, most of the sectoral indices on the NSE settled in the green, CNX PSU Bank remained the major gainer, up 1.98% followed by CNX Auto up 1.31% and Bank Nifty up by 1.23% while CNX IT and CNX Energy declined 0.55% and 0.36% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 2.28% and reached 22.23.

The India VIX witnessed contraction of 2.28% at 22.23 as compared to its previous close of at 22.75 on Friday.

The 50-share S&P CNX Nifty gain 18.75 points or 0.36% to settle at 5226.20.

Nifty April 2012 futures closed at 5,248.45 at a premium of 22.25 points over spot closing of 5,226.20, while Nifty May 2012 futures were at 5,282.85 at a premium of 56.65 points over spot closing. The near month April 2012 derivatives contract will expire on Thursday i.e. April 26, 2012. Nifty April futures saw contraction of 0.19 million (mn) units taking the total outstanding open interest (OI) to 17.02 mn units.

From the most active contract, Tata Motors April 2012 futures were at a discount of 0.25 point at 301.30 compared with spot closing of 301.55. The number of contracts traded was 17,952.

HDIL April 2012 futures were at a premium of 0.20 point at 87.35 compared with spot closing of 87.15. The number of contracts traded was 11,273.

Tata Steel April 2012 futures were at a discount of 1.45 points at 455.15 compared with spot closing of 456.60. The number of contracts traded was 10,092.

Reliance Industries April 2012 futures were at a premium of 2.20 point at 750.25 compared with spot closing of 748.05. The number of contracts traded was 11,670.

ICICI Bank April 2012 futures were at a premium of 3.90 point at 878.90 compared with spot closing of 875.00. The number of contracts traded was 18,503. Among Nifty calls, 5400 SP from the April month expiry was the most active call with an addition of 0.74 million open interest.

Among Nifty puts, 5200 SP from the April month expiry was the most active put with contraction of 0.09 million open interest.

The maximum OI outstanding for Calls was at 5400 SP (7.47mn) and that for Puts was at 5200 SP (6.34mn).

The respective Support and Resistance levels are: Resistance 5245.3-- Pivot Point 5214.4 -- Support 5195.3.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.11 for April -month contract.

The top five scrips with highest PCR on OI were ABG Ship 3.71, Apil 3.00, Patni 2.10, Hindustan Zinc 2.00, and TataChem 2.00

Among most active underlying, IFCI witnessed an addition of 0.44 million of Open Interest in the April month futures contract followed by RCOM which witnessed an addition of 0.83 million of Open Interest in the near month contract. Meanwhile, JP Associates Infra witnessed contraction of 1.00 million in the April month futures. Also, Tata Motor witnessed an addition of 1.72 million in Open Interest in the April month contract. Finally, witnessed Hindalco witnessed an addition of 0.79 million of Open Interest in the near month futures contract.