Nifty snaps three day losing streak; regains 6,750 mark

After a positive opening, Nifty in a renewed show of exuberance, defied all negative macros and subdued sentiments as it went from strength to strength regaining important levels before it closed one and a half percent above the neutral line. The 50-share index, gained as sustained buying was witnessed mostly in all the key heavyweights along with broader indices.Technology stocks gained, after top software exporter Tata Consultancy Services and HCL Technologies posted better-than-expected earnings. However, foreign investors, who have pumped $4.8 billion into Indian shares so far this year, sold shares worth of 446.9 million rupees ($7.4 million) on April 17, 2014, marking it their third consecutive session of outflows.

In today's session in April options segment, many traders exited from 6900 and 6800 calls on the back of profit booking, while some traders have added their position in 6700 and 6800 puts on expectations of a small correction in index. A look at open interest (OI) in the Nifty May and June options segment offers some insight on expectations. There's a lot of open interest in June 7,000 and 7,500 calls, and OI in the 6,000 and 5,000 puts. The December 2014 series also shows OI in the 8,000 calls and the 5,000 puts.

Moreover, India VIX - the gauge of underlying volatility in the market - has declined for second consecutive day as traders turned cautious after three day’s losing streak of Nifty. Falling India VIX indicates that traders have slowed down buying options contracts. The top gainers from the F&O segment were Apollo Tyres, Crompton Greaves and Arvind. The top losers were Zee Entertainment Enterprises, Jubilant Foodworks and Just Dial.

Most of the sectoral indices on the NSE were settled in the green, CNX PSU Bank remained the major gainer, up 2.90% followed by CNX Realty up 2.64%, CNX Auto up by 2.26%, CNX Metal up by 1.82%, Bank Nifty up by 1.78%, CNX Energy up by 1.64%, CNX Finance up by 1.60%, CNX FMCG up by 1.43%, CNX IT up by 1.26% and CNX Pharma up by 0.82% while CNX Media declined by 0.28% remained the lone loser in the trade.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility was down by 0.98% and reached 30.8525. The 50-share CNX Nifty surged by 104.10 points or 1.56% to settle at 6,779.40.

Among Nifty calls, 6,700 SP from the April month expiry was the most active call with addition of 0.86 million open interest. Among Nifty puts, 6800 SP from the April month expiry was the most active put with addition of 2.52 million open interest.

The maximum OI outstanding for Calls was at 6,800 SP (4.85 mn) and that for Puts was at 6,700 SP (6.95 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6813.50-- Pivot Point 6748.95- Support -- 6714.85.

The Nifty Put Call Ratio (PCR) finally stood at 1.39 for April month contract. The top five scrips with highest PCR on OI were Ambuja Cements 1.57, MRF 1.50, Cairn 1.13, HDFC 1.07 and PNB 0.98.

Among most active underlying, TCS witnessed addition of 0.20 million of Open Interest in the April month futures contract, followed by SBI witnessing addition of 0.23 million of Open Interest in the April month contract; Infy witnessed a contraction of 0.13 million of Open Interest in the April month futures contract. Adani Enterprises witnessed an addition of 0.19 million of Open Interest in the April month contract and ICICI Bank witnessed an addition of 1.18 million of Open Interest in the expiring April month's future contract.