Shrugging off the bearish sentiment in the last couple of sessions, the markets opened in the positive today and sustained their strength throughout the session. A late afternoon burst led the Sensex to finally end at 14,678 (up 135 points) and the Nifty to close at 4,416 (up 48 points).
The Nifty August futures moved in a narrow band of 4360-4400 for most part of trading, on thin volumes, indicating indecisiveness among the derivatives participants. However, the volumes improved in the final hour as traders took long positions in the Nifty current and next month futures.
The Nifty August futures closed at 4442 and the Nifty September futures ended at 4440, up 52 points each. The Nifty August futures added open interest of 2.70 million shares, while the September futures added open interest of 1.03 million shares. This was a positive development, given the unwinding of long positions in the last five days.
The upside seems limited as the 4500 mark could pose stiff resistance. The Nifty, however, has a strong support at 4300, with the PCR at this strike price being comfortably high at 2.16. Moreover, the put sellers have not squared off their short positions at the 4300 strike price.
Among the stock futures, there has been a significant long build-up in telecom and metal stocks. Reliance Communication was up four per cent and the September futures witnessed strong rollovers of 2.27 million shares. Bharti Airtel was up 2.6 per cent, while its September futures added 531,250 shares in open interest.
Fertiliser stocks were back in the reckoning as the finance minister approved a cash payment of Rs 22,000 crore as subsidy. to the fertilizer companies.