After witnessing a steep fall of about a percent in previous session, Indian benchmark Nifty exhibited fabulous performance through the day’s trade on Friday snapping the session at its 14-month high near crucial 5,700 mark after the government notified FDI in retail, aviation, broadcasting and power exchanges. The sentiments also got boost after government approved the operational features of the Rajiv Gandhi Equity Savings Scheme, allowing an income-tax waiver of 50% on new equity investments of up to Rs 50,000 by retail investors who have annual income of less than Rs 10 lakh. The global cues too remained supportive as most of the Asian counters ended in the positive as investors remained comforted by recent central bank steps to support the global economy in the face of weak data while, European counters too traded with traction in the early deals, supported by speculation that Spain could soon request a bailout and optimism that central bank action will revive growth.
Earlier, the benchmark made a gap-up opening after government on Thursday notified its decision to allow FDI in multi-brand retail, aviation and broadcasting sectors. Market continued gaining strength during first half supported by retail and aviation stocks, which picked up pace after the government braved intense political opposition to notify rules for allowing foreign retailers such as Walmart and Carrefour to set up stores in India on Thursday. Moreover, market touched its intraday high conquering psychological 5,700 level on reports that Samajwadi Party has pledged to continue support to the government on a day when Mamata Banerjee-led Trinamool Congress pulled out of UPA. The sentiments also remained bullish after government slashed the withholding tax on overseas borrowing by local companies to 5% from 20% at present. The reduction in tax will encourage Indian companies to raise funds from the overseas markets. The withholding tax liability on Indian companies was also reduced to 5%, which will apply to funds borrowed between July 2012 and June 2015. Moreover, investors continued piling up hefty positions across the board till end on reports indicating that the Centre could announce further reform-centric measures in the near term to counter the lingering impression of policy paralysis. Finally, Nifty ended the terrific session near its crucial 5,700 mark with a gain of about two and half a percent.
Meanwhile, most of the sectoral indices on the NSE were settled in the green, CNX PSU Bank remained the major gainer, up 4.25% followed by CNX Infra up 4.22% and CNX Metal up by 4.02% while CNX IT and CNX Media declined 0.67% and 0.26% remained the top losers in the trade. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, rose 1.66% and reached 18.93.
The India VIX witnessed an addition of 1.66% at 18.93 as compared to its previous close of at 18.62 on Thursday.
The 50-share S&P CNX Nifty gained 136.90 points or 2.46% to settle at 5,691.15.
Nifty September 2012 futures closed at 5707.05 on Friday at a premium of 15.90 points over spot closing of 5,691.15, while Nifty October 2012 futures were at 5728.85 at a premium of 37.70 points over spot closing. Nifty September futures saw an addition of 0.26 million (mn) units taking the total outstanding open interest (OI) to 22.14 mn units. The near month September 2012 derivatives contract will expire on Thursday i.e. September 27, 2012.
From the most active contracts, Tata Motors September 2012 futures were trading at a premium of 0.65 at 275.75 compared with spot closing of 275.10. The number of contracts traded was 19,458.
BHEL September 2012 futures were trading flat compared with spot closing of 232.30. The number of contracts traded was 18,241.
Tata Steel September 2012 futures were at a premium of 0.80 point at 410.40 compared with spot closing of 409.60. The number of contracts traded was 17,651.
Reliance Industries September 2012 futures were at a discount of 0.50 point at 852.05 compared with spot closing of 852.55. The number of contracts traded was 16,423.
ICICI Bank September 2012 futures were at a premium of 2.35 point at 1068.90 compared with spot closing of 1066.55. The number of contracts traded was 28,834.
Among Nifty calls, 5700 SP from the September month expiry was the most active call with contraction of 0.68 million open interest.
Among Nifty puts, 5500 SP from the September month expiry was the most active put with an addition of 0.84 million open interest.
The maximum OI outstanding for Calls was at 5700 SP (6.64 mn) and that for Puts was at 5400 SP (8.41 mn).
The respective Support and Resistance levels are: Resistance 5748.95 -- Pivot Point 5662.2 --Support 5604.4.
The Nifty Put Call Ratio (PCR) OI wise stood at 1.71 for September-month contract.
The top five scrips with highest PCR on OI were India Info 5.33, Mphasis 3.00, CESC 2.89, Jindal Steel 2.26, and Grasim 2.00.
Among the most active underlying, IFCI witnessed contraction of 2.96 million of Open Interest in the September month futures contract followed by JP Associates, which witnessed an addition of 0.39 million of Open Interest in the near month contract. Meanwhile, RCOM witnessed an addition of 1.30 million in the September month futures. Also, Unitech witnessed contraction of 6.22 million in Open Interest in the September month contract. Finally, Shree Renuka Sugar witnessed contraction of 0.56 million of Open Interest in the near month futures contract.
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