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Even though global markets demonstrated a weak session and domestic IIP data showed a negative growth, Indian stocks recovered sharply and ended in the positive terrain Friday as bears covered their shorts on expectations that the government may announce a heavy incentive package to stimulate the economy.

National Stock Exchange's 50-share Nifty ended at 2921.35, slightly higher by 0.04 per cent. Tracking the weak global cues, Indian markets fell at the open but short covering in the late trade helped stocks to recouped early losses. In a highly volatile session Nifty touched a high of 2936.80 and low of 2812.55, a band of around 124 points.

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As per the NSE website data (provisional), Nifty December futures provisionally closed at a discount of 11 points to spot. The contract price slipped 0.62 per cent while open interest added 38 lakh shares in open interest. The contract trimmed its premium of 8 points on Thursday indicating some build up of shorts at higher levels.

On sectoral front-- realty, consumer durables, oil & gas and banking stocks outperformed the benchmark while, IT, Tech, healthcare and auto ended in red.

Some amount of call buying was observed at 2900 and 3200 strike while good amount of tussle can be seen at 3000 level. Bears unwound their written calls at 3100 strike. On the other hand, huge amount of put writing was observed from strike 2900 to 2700. The call build up was little lackluster while solid put writing was seen at lower levels. This indicates Nifty will remain volatile in a range but won't fell significantly from current levels.

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"This is a traders market. Investors are going short in early trade and covering up shorts at late trade and vice-versa. However, despite the negative IIP data, markets recovered sharply came as a surprised to everybody. If one can look through the technical chart for past few days markets are making a doji candle-- suggesting market is waiting for a breakout to either side," said Sanjay Rao, analyst at Spark Advisory.

Given the rising signs of slowdown Indian government is likely to announce a strong stimulus package to boost the economy. However, some analysts are feeling that this is a distribution stage and one can expect a bigger fall in near term.

In stock futures—Reliance Industries December gained 2.66 per cent and open interest added 2.73 lakh shares. Reliance Natural rose 0.27 per cent and added 5 lakh shares in open interest. State Bank of India advanced 0.3 per cent and Reliance Capital jumped 6 per cent.

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source - www.economictimes.com (read full article)
published under - nifty updates, NSE Updates, indian markets updates, indian share markets, markets in india, global uncertainities in india.