Nifty witnesses consolidation after yesterday’s relief rally

After witnessing gains of over a percentage point in previous trade, market witnessed consolidation amid a volatile trading session on Tuesday as traders rolled over positions from the near-month May series to June. Though, market made a promising start and traded with decent gains throughout the day’s trade on the back of positive global cues, but ended on a flat note as investors pared all of their initial gains due to mounting concerns over the health of Spanish banks while weakness in the rupee too weighed on the sentiments. On the global front, Asian counters rallied amid hopes that Greece will avoid exiting the euro-zone, moreover, hopes that China will implement new stimulus policies to lift domestic demand and fast track some major construction projects too aided the regional sentiments. Meanwhile, Japan and China said that they would allow direct trading in each other’s currencies for the first time. Moreover, buoyed by China’s stimulus hopes, European counters too were trading with traction at this point of time.

Back home, extending its previous session’s rally, local benchmark made a promising start reclaiming its crucial 5,000 mark on the back of firm global cues. But, market pared all its gains and turned negative immediately after half an hour of trade as sentiments turned bearish after Telecom stocks like Bharti Airtel came under selling pressure after a price cut by Morgan Stanley while, Idea Cellular and Reliance Communications ended lower on the back of Morgan downgrade. Moreover, PSU oil marketing companies slide for the second day in a row after Oil Minister Jaipal Reddy on May 28, 2012, said the government is not considering any immediate increases in diesel and cooking fuel prices. But, sentiments once again turned bullish after the Reserve Bank of India (RBI) removed restrictions which prevented banks from levying penalty on customers for foreclosure of some term deposits. Thereafter, the index traded in the tight range but comfortably over its crucial 5,000 mark. Market extended its gains in the early noon trade as European counters also opened on a firm note. Meanwhile, software shares were up after worries over political uncertainty in Greece eased on reports, which said that the opinion polls are indicating victory for the New Democracy party, which is in favour of a bail-out, in the Greek general re-election to be held next month. The euro-zone is the second largest revenue generator for Indian software exporters after the US. Wipro, Infosys, HCL Tech and TCS surged 1-3 percent each. However, it was the final hour of trade where market erased most of its gains following European counters, which also pared some of their gains as concerns over the health of Spanish banks weighed down on risk appetite of the investor’s across the globe. Finally, Nifty ended the day’s trade with a marginal gain of about 4.5 points.

Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX IT remained the major gainer, up 1.13% followed by CNX Realty up 0.71% and CNX Metal up by 0.55% while CNX FMCG declined 1.04% in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 1.47% and reached 24.03.

The India VIX witnessed an addition of1.48% at 24.03 as compared to its previous close of at 23.68 on Monday.

The 50-share S&P CNX Nifty gain 4.45 by point or 0.09% to settle at 4990.10.

Nifty May 2012 futures closed at 4,981.65 at a discount of 8.45 points over spot closing of 4,990.10, while Nifty June 2012 futures were at 4,985.65 at a discount of 4.45 points over spot closing. The near month May 2012 derivatives contract will expire on Thursday i.e. May 31, 2012. Nifty May futures saw a contraction of 1.51 million (mn) units taking the total outstanding open interest (OI) to 16.28 mn units.

From the most active contract, Tata Motors May 2012 futures were at a premium of 2.25point at 276.15 compared with spot closing of 273.90. The number of contracts traded was 22,388.

Tata Steel May 2012 futures were at a discount of 1.15 point at 414.10 compared with spot closing of 415.25. The number of contracts traded was 18,721.

ICICI Bank May 2012 futures were at a discount of 18.85 points at 820.65 compared with spot closing of 839.50. The number of contracts traded was 26,796.

Reliance Industries May 2012 futures were at a discount of 7.55 point at 693.40 compared with spot closing of 700.95. The number of contracts traded was 15,522. 

Axis Bank May 2012 futures were at a discount of 1.85 point at 1019.80 compared with spot closing of 1,021.65. The number of contracts traded was 13,795. 

Among Nifty calls, 5100 SP from the May month expiry was the most active call with an addition of 0.49 million open interest.

Among Nifty puts, 4700 SP from the May month expiry was the most active put with  contraction of 0.37 million open interest.

The maximum OI outstanding for Calls was at 5100 SP (6.97 mn) and that for Puts was at 4700 SP (8.19mn).

The respective Support and Resistance levels are: Resistance 5012.78-- Pivot Point 4997.46--Support 4974.78.

The Nifty Put Call Ratio (PCR) OI wise stood at 0.98 for May-month contract.

The top five scrips with highest PCR on OI were ABG Ship 47.00, WelCorp 6.63, Asian Paints 2.27, Tata Communication 2.00, and Bomdyeing 1.67.

Among the most active underlying, Suzlon witnessed contraction of 23.85 million of Open Interest in the April month futures contract followed by IFCI which witnessed a contraction of 4.81 million of Open Interest in the near month contract. Meanwhile, JP Associates witnessed contraction of 6.17 million in the April month futures. Also, RCOM witnessed contraction of 5.83 million in Open Interest in the April month contract. Finally, Unitech witnessed contraction of 7.92 million of Open Interest in the near month futures contract.