Recovery in second half help Nifty to regain 5,200 mark

Domestic index S&P CNX Nifty pared most of its initial losses quite nicely in the second half of day’s trade to end the session near its previous close with a marginal cut of just 10 points. The recovery in the domestic market was aided by a sharp bounce back in European markets. On the global front, Asian markets, after opening in the red, end mixed as some of the regional peers made last hour recovery to close in green. However, European stocks inched higher in the early trade as investors await US jobs data that could potentially fuel expectations of further stimulus from the Federal Reserve. Meanwhile, Euro-zone private sector activity contracted for the 10th time in 11 months in July, with data now consistently showing the downturn becoming ‘entrenched’ in Germany.

Initially, the benchmark made a gap-down opening as European Central Bank (ECB) disappointed investors. Sentiments remained bearish with IMD’s statement that monsoon rains will not be enough to save the country from its first drought in three years, monsoon rains crucial for the agriculture has been termed deficient by 19 percent and may add up to the inflationary pressure. Sentiments also got undermined after money market woes resurfaced as Indian rupee weakened further and breached its crucial 56 per dollar mark. The benchmark touched its intraday low near its crucial 5,150 mark in the late morning trade. But, second half belonged completely to the bulls, which showed tremendous recovery and pared most of the initial losses following firm trade in European markets. The Indian benchmark regained its crucial 5,200 bastion in the final hour of trade as investors relentlessly bought blue-chip stocks from the Oil and Gas, defensive healthcare and technology spaces. However, market was unable to gain its positive trajectory as pressure came in from shares of telecom related companies, which fell ahead of the likely Cabinet meet today to discuss the reserve price and usage charges of spectrum, deferred payment options by operators and rollout obligations. Moreover, shares of public sector oil marketing companies extended two-day fall triggered on rising under-recoveries on diesel and PDS kerosene. Finally, Nifty ended the session near pre-close level with a marginal cut of 0.23 percent.

Meanwhile, most of the sectoral indices on the NSE were settled in the red, CNX Metal remained the major loser, down 1.55% followed by CNX Auto down 0.67% and CNX Realty down by 0.66% while CNX Pharma and CNX IT surged 0.69% and 0.47% respectively in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, tumbled 3.88% and reached 16.12.

The India VIX witnessed contraction of 3.88% at 16.12 as compared to its previous close of at 16.77 on Thursday.

The 50-share S&P CNX Nifty lost 12.05 points or 0.23% to settle at 5,215.70.

Nifty August 2012 futures closed at 5241.05 on Friday at a premium of 25.35 points over spot closing of 5,215.70, while Nifty September 2012 futures were at 5266.70 at a premium of 51.00 points over spot closing. Nifty August futures saw contraction of 0.17 million (mn) units taking the total outstanding open interest (OI) to 22.40 mn units. The near month August 2012 derivatives contract will expire on Thursday i.e. August 30, 2012.

From the most active contracts, Tata Motors August 2012 futures were at a premium of 1.35 points at 222.45 compared with spot closing of 221.10. The number of contracts traded was 10,967.

Tata Steel August 2012 futures were at a premium of 4.10 point at 400.00 compared with spot closing of 395.90. The number of contracts traded was 15,025.

ICICI Bank August 2012 futures were at a premium of 7.40 point at 946.35 compared with spot closing of 938.95. The number of contracts traded was 20,159.

JSW Steel August 2012 futures were at a premium of 2.20 points at 703.85 compared with spot closing of 701.65. The number of contracts traded was 8,358.

SBI August 2012 futures were at a premium of 9.40 point at 2013.40 compared with spot closing of 2004.00. The number of contracts traded was 30,391.  

Among Nifty calls, 5500 SP from the August month expiry was the most active call with an addition of 0.98 million open interest.

Among Nifty puts, 5000 SP from the August month expiry was the most active put with an addition of 0.82 million open interest.

The maximum OI outstanding for Calls was at 5500 SP (8.03 mn) and that for Puts was at 5000 SP (10.25 mn).

The respective Support and Resistance levels are: Resistance 5235.71 -- Pivot Point 5200.18 --Support 5180.16.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.35 for August -month contract.

The top five scrips with highest PCR on OI were Oriental Bank 5.00, WEL Corp 3.42, YES Bank 2.47, STR Tech 2.00, and Sun Pharma 1.99

Among the most active underlying, IFCI witnessed an addition of 0.32 million of Open Interest in the August month futures contract followed by RCOM which witnessed contraction of 0.92 million of Open Interest in the near month contract. Meanwhile, JP Associates witnessed an addition of 1.61 million in the August month futures. Also, Renuka witnessed an addition of 0.10 million in Open Interest in the August month contract. Finally, Tata Motors witnessed an addition of 0.59 million of Open Interest in the near month futures contract.