Nifty witnesses strong rally on supportive global cues; surpasses 5,550 mark

The local benchmark, Nifty witnessed a terrific run for the day and garnered gain of more than one and a half percent snapping the day’s trade near its intraday high, crossing its crucial 5,550 mark on Wednesday tracking strong global cues. Earlier, the Indian equity market made a strong start tracking positive cues from Asian counterparts. Afterwards, the index extended its initial gains and traded firm till late morning trade supported by massive buying witnessed in broader indices. Market slipped in the late morning trade and pared some of its initial gains after the data showed that the Indian economy grew by a lower-than-expected 7.8% in Q4. However, for the full fiscal year to March 2011 India’s economy posted growth of 8.5%, a shade below the government’s expectation of 8.6% expansion. But, benchmark found strong support near its crucial 5,500 level and sentiments turned bullish again as the lower GDP growth in March eased fears of a hawkish policy stance by the Reserve Bank at its policy meet scheduled on June 16. While, firm opening in European counterparts too bolstered the buoyant sentiment. The local index continued its bull run till end led by rate sensitive sectors viz. realty and banking, which showed a great run and ended the session with a gain of over two percent. Finally, Nifty garnered a gain of about 90 points and snapped the day’s trade near its intraday high.

On the global front, the US markets were closed overnight. However, all the Asian equity indices finished the day’s trade in the positive terrain on report that Japan’s factory output rebounded from a record drop following the devastating earthquake and tsunami. All the European counterparts were trading on a strong note where major indices like; DAX, CAC and FTSE had gained in a range of 1-2 percent at this point of time. Back home, broad based buying supported all sectoral indices on the NSE to settle in the positive territory with CNX Realty surging the most and ending with a gain of over two and a half percent followed by Bank Nifty, CNX Infra and CNX IT. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, declined 5.87% and reached 16.82, while S&P Nifty moved higher by 87.05 points to close at 5,560.15. The markets registered volumes of over Rs 1.14 lakh crore while the turnover for NSE F&O segment remained higher compared to Monday at over Rs 0.96 lakh crore.

The India VIX lost 5.87% at 16.82 on Tuesday as compared to its previous close of 17.87 on Monday.  

The 50-share S&P CNX Nifty gained 87.05 points or 1.59% and settled at 5,560.15.

Nifty June 2011 futures closed at 5,552.20, at a discount of 7.95 points over spot closing of 5,560.15, while Nifty July 2011 futures were at 5,566.00 at a premium of 5.85 points over spot closing. The near month June 2011 derivatives contract expires on Thursday, June 30, 2011. Nifty June futures saw addition of 9.94% or 2.19 million (mn) units, taking the total outstanding open interest (OI) to 24.23 mn units.

From the most active underlying, SBI’s June 2011 futures closed at a premium of 7.00 points at 2308.00 compared with spot closing of 2301.00. The number of contracts traded was 28,123.

Tata Motors June 2011 futures were at a discount of 0.25 point at 1098.50 compared with spot closing of 1098.75. The number of contracts traded was 22,217.

Titan Industries June 2011 futures were at a premium of 10.80 points at 4332.80 compared with spot closing of 4322.00. The number of contracts traded was 8,885.

Tata Steel June 2011 futures were at a premium of 1.60 at 591.60 compared with spot closing of 590.00. The number of contracts traded was 16,034.

Infosys June 2011 futures were at a premium of 17.60 points at 2809.85 compared with spot closing of 2792.25. The number of contracts traded was 12,661.For Nifty calls, 5600 strike price (SP) from the June series was the most active call with an addition of 0.81 million or 18.92%.

Among Nifty puts, 5400 SP from the June month expiry was the most active put with contraction of 1.08 million or 20.78%.

The maximum Call OI outstanding was at 5500 SP (5.09mn) and that for Puts at 5400 SP (6.29mn).

The respective Support and Resistance levels are: Resistance 5591.26-- Pivot Point 5540.48-- Support 5509.36.

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

The top five scrips with highest PCR on OI were Sintex -4.00, Central Bank -3.50- Areva T&D -2.00, Punjab National Bank-1.88, Bajaj Auto-1.29.

Among most active underlying, State Bank of India (SBI) witnessed contraction of 3.06% in the June month futures contract, followed by Tata Motors (SBI) which added 3.60% of Open Interest (OI) in the near month contract. Meanwhile, Punj Lloyd too witnessed an addition of 4.72% in the June month futures coupled with  Tata Steel which added 0.75% in the June month future contract.