Nifty 50 Sensex From The Desk Of Research

The rebound in international crude prices by around a percent in the back of the ongoing turbulence in Libya and neighboring nations too weighed on the local sentiments. However, the rally in software and technology stocks capped the downside risks for the markets while the ease in inflation numbers to single digits during the week-ended March 19 after showing an unexpected increase in the previous week also supported the investor mood.

Indian frontline indices went through a rollercoaster ride on the settlement day of March series futures and options contracts as sentiments turned highly volatile in the second half of the session. The seven successive days of winning streak got extended for yet another day, thanks to the late short covering rally after the indices drifted to the red terrain on the back of hefty position squaring in rate sensitive and healthcare counters . The rebound in international crude prices by around a percent on the back of the ongoing turbul ences in Libya and neighboring nations too weighed on the local sentiments.

However , the rally in software and technology stocks capped the downside risks for the markets while the ease in inflation numbers to single digits during the week-ended March 19 after showing an unexpected increase in the previous week also supported the investor mood. The NSE's 50share broadly followed index Nifty, settled a tad below the crucial 5,850 support level, after surging around a percent while Bombay stock Exchange's Sensitive Index, or Sensex garnered over one hundred fifty points and closed just below the psychological 19,450 level. In the broader markets especially the mid cap stocks after a tremendous rally in last session showed some sign of fatigue but managed to hold in green. The BSE's Midcap and Smallcap indices went home with trivial gains of 0.29% and 0.21% pectively, underperforming their larger peers by quite a margin. On the sectoral front, The IT pocket grabbed the top gainer's position after garnering 1.92% on hopes that upbeat results and outlooks last week from global technology majors Oracle Corp and Accenture bode well for resurgence in tech spending. 

The paper stocks continued to remain in jubilant mood while AP Paper Mills once again got locked in upper circuit other paper stocks too traded higher. On the other hand, the Banking sector languished at the bottom of the table after slipping 0.70% as majors like SBI and Indusind Bank plummeted 3.19% and 4.87% respectively..Among most active underlyings SBI witnessed a contraction of 13.08% in the March month futures contract, followed by Reliance which saw a contraction of 7.05% of OI in the near month contract. Tata steel witnessed an addition of 0.50% in the near-month futures and Tata Motors witnessed an addition of 14.21% in the near month futures contract . Meanwhile, the government is set to release a revised FDI policy circular later in the day hoping to attract greater amount of foreign funds in the next financial year beginning April 1. Among other modifications, the third edition of the Consolidated FDI Policy Circular (CFPC) may contain guidelines on domestic companies issuing shares to foreign entities for considerations other than cash, a move aimed at checking possible misuse of FDI policy to engage in money laundering.

At current juncture we expect the same scenario in the upcoming sessions though possibility of profit booking around 5875-5885 couldn't be rule out. Any closing above this level may generate another 250-300 pts rally and we might see 6070-6080 in the next series. On the flip side any negative outcome from global side particularly from Middle East Asia may dampens the current euphoria. Technically too spot index rallied from last 8 consecutive sessions. Therefore ossibility of minor retracement near to 5550-5570 could be on higher side however any correction should be used to create fresh long positions.

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Indian Equity Witness From the Desk Of Editor By mansukh

Indian equities witnessed yet another unstable day of trade as markets across the globe got annihilated on the back of lingering public protests in Egypt which showed little signs of dying down. However, the National stock exchange and Bombay Stock Exchange showed some intentions to bounce back in to the green territory in the dying hours of trade but only managed to close below the neutral line. Hefty short covering in the late trade by investors at lower levels ensured that the domestic indices which plunged around one and half a percent in the early trade, go home with moderate losses. The NSE's 50-share broadly followed index, Nifty took a marginal cut and ended a tad above the 5,500 support level while the Bombay Stock Exchange's Sensitive Index Sensex drifted lower to close around the psychological 18,300 mark. On the global front, cues from the Asian markets largely remained negative as investors relentlessly squared-off positions,

on the back of the civil upheaval in Egypt as investors remained apprehensive that the political unrest in Egypt may continue and spread across the Middle East. India's food inflation remained flat in the week ended Jan 15 after having shown some significant decline in the previous two weeks. According to the data released by the ministry of commerce and industry on Thursday, food price index rose 15.57% on annual basis during week-ended Jan 15, nearly flat compared with 15.53% recorded in the previous week. On a sequential or week-on-week basis, the index for food goods increased by 0.1% to 190.8 from 190.6 for the previous week, mainly due to higher prices of grains and vegetables. The Reserve Bank of India (RBI) implemented yet another rate hike on Tuesday when it issued the last quarterly review of monetary policy for the current financial year. The action however was much in line with the market expectations as most analysts expected at least a 25 bps hike in wake of recent surge in inflation seen in December. The repo and reverse repo rates now stand at 6.5% and 5.5% respectively.

From F&O Section, Nifty February 2011 futures closed at 5524.40, at a premium of 18.50 points over spot closing of 5505.90, while Nifty March 2011 futures were at 5540.00, at a premium of 34.10 points over spot closing The near month February 2011

Derivatives contracts expire on Thursday, February 24, 2011. Nifty February futures saw an addition of 13.07% or 2.67 million (mn) units, taking the total outstanding open interest (OI) to 23.09 mn units. For Nifty calls, 5600 strike price (SP) from the February series was the most active call with addition of 0.37 mn or 10.94%. Among Nifty puts, 5400SP from the February month expiry was the most active put with an addition of 0.87 mn or 13.03%. The maximum Call OI outstanding was at 5600 SP (3.76mn) and that for Puts at 5400 SP (7.62mn). The respective Support and Resistance levels are: Resistance 5549.61, Pivot Point 5483.13 Support 5439.41. The Nifty Put Call Ratio (PCR) OI wise stood at 1.15 for February-month contracts.