Final hour recovery helps Nifty to reclaim 5,050 mark

Domestic index S&P CNX Nifty witnessed a jubilant run in the last leg of trade, after languishing in the red for most of the day and snapped the day’s trade near its intraday high recapturing its crucial 5,050 mark. Sentiments took U-turn in the final hour of trade and bulls came back in action led by upmove in banks, FMCG, infra and power stocks while, value buying in fundamentally strong stocks too supported the turnaround. However, global cues remained subdued as all the Asian equity indices shut shop in the negative terrain on last trading day of the week as market participants remained influenced by the disappointing overnight cues from US markets after Federal Reserve Chairman Ben Bernanke dimmed hopes for more stimulus measures. Moreover, European shares were trading lower on Friday on renewed worries over banking crisis in Spain and Germany’s trade deficit widened with imports surpassing exports after seasonal adjustment.

Initially, the benchmark opened lower tracking weakness in other Asia counterparts. Moreover, the rupee fell 23 paise and traded at 55.17 against the dollar in early trade too dampened the sentiments. The global cues too remained choppy after Federal Reserve Chairman Ben Bernanke’s comments dimmed hopes for more US stimulus. Market continued its southbound journey till late morning trade as metal stocks declined on worries of fall in commodity demand after China on Thursday signaled that grim economic data is on the cards. Afterwards, selling intensified and market breached its crucial 5,000 mark in the mid morning trade following weakness in European counters while, Reserve Bank of India Deputy Governor KC Chakrabarty said the interest rates are not too high to affect growth, dampening hopes of a rate cut later this month. But, 5,000 proved to be the excellent support level for the Nifty and market started recovering from that level. In the last leg of trade, market witnessed vertical climb and regained its green trade recapturing its crucial 5,050 mark supported by index heavyweight, L&T, RIL and ITC moreover, recovery in European counters too aided the sentiments. Finally, Nifty closed with gains for the fifth straight day near its intraday high.

Meanwhile, broad based buying supported most of the sectoral indices on the NSE to settle in the positive territory with CNX Realty surging the most and ending with a gain of 1.69% followed by CNX Infra up 1.29% and CNX PSU Bank up 1.00% while, CNX IT down by 0.77% was the lone loser on the NSE sectoral indices. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 0.71% and reached 23.47.

The India VIX witnessed contraction of 0.72% at 23.47 as compared to its previous close of at 23.64 on Thursday.

The 50-share S&P CNX Nifty gain 18.70 by point or 0.37% to settle at 5,068.35.

Nifty June 2012 futures closed at 5,059.40 at a discount of 8.95 points over spot closing of 5,068.35, while Nifty July 2012 futures were at 5,078.15 at a premium of 9.80 points over spot closing. The near month June 2012 derivatives contract will expire on Thursday i.e. June 28, 2012. Nifty June futures saw contraction of 0.30 million (mn) units taking the total outstanding open interest (OI) to 15.66 mn units.

From the most active contract, HDIL June 2012 futures were at a premium of 0.25 point at 73.30 compared with spot closing of 73.05. The number of contracts traded was 21,471.

Tata Motors June 2012 futures were at a premium of 0.10 point at 239.80 compared with spot closing of 239.70. The number of contracts traded was 14,851.

DLF June 2012 futures were at a premium of 0.90 point at 197.40 compared with spot closing of 196.50. The number of contracts traded was 14,263.

Tata Steel June 2012 futures were at a discount of 1.75 point at 409.25 compared with spot closing of 411.00. The number of contracts traded was 13,965.

ICICI Bank June 2012 futures were at a premium of 0.65 point at 831.00 compared with spot closing of 830.35. The number of contracts traded was 21,123. 

Among Nifty calls, 5100 SP from the Jun month expiry was the most active call with an addition of 0.07 million open interest.

Among Nifty puts, 4800 SP from the Jun month expiry was the most active put with an addition  of 0.17 million open interest.

The maximum OI outstanding for Calls was at 5100 SP (5.03mn) and that for Puts was at 4800 SP (7.53mn).

The respective Support and Resistance levels are: Resistance 5103.6-- Pivot Point 5049.2--Support 5013.95.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.70 for Jun -month contract.

The top five scrips with highest PCR on OI were ABG Ship 7.33, MRPL 5.50, ABB 4.00, Orient Bank 3.00, and Fortis 1.50.

Among the most active underlying, LITL witnessed an addition of 0.81 million of Open Interest in the June month futures contract followed by IFCI which witnessed contraction of 0.26 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed contraction of 0.02 million in the June month futures. Also, Jaiprakash Associates witnessed contraction of 0.89 million in Open Interest in the June month contract. Finally, Tata Motors witnessed contraction of 0.68 million of Open Interest in the near month futures contract.