Nifty opened marginally higher near the psychological benchmark

• tanvi_singh
• March 11, 2010

Nifty opened marginally higher near the psychological benchmark of 5100 and subsequently moved further near its resistance at 5140. It finally settled at 5118.25, up 0.42%. Volumes were a shade better than Tuesday’s, at 66,000 crore. The Rs-4 discount evaporated as the 0.16 million shares added in Nifty futures open interest (OI), which helped the basis turn positive to Rs 2.

The 5000 puts continued to add OI for the fourth consecutive session. It added over a million shares on Wednesday. The 5000 strike now holds almost 14 million shares in OI, suggesting that at least on the option front, writers feel that in case of a down move, the 5000 levels would hold. We, however, would be wary of unwinding triggers in case Nifty falls below the 5000 mark. Nifty has been unable to cross the immediate resistance of 5140 for three-to-four sessions.

Tracing the collapse in sugar prices in the international commodity markets, it is found that sugar stocks have seen a severe price damage. All the four sugar stocks in the F&O space saw short built-ups with Triveni seeing the highest OI change at 13%. Technology stocks, especially TCS, have been firm over the past two sessions and can extend gains.

A short built-up was also seen in LIC Housing Finance, Opto Circuit, Nagararjuna Constructions and Bharat Forge. In our opinion, Bharat Forge will continue to see further price collapse and we also feel a target of Rs 252 is quite achievable in the near term. Among the stocks under our coverage, scrips which look positive are IDFC, Hero Honda and HDFC.
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• Last Modified: March 11, 2010
• Filed Under: Latest News, MARKETS, NATION, WORLD