Nifty ends April series above 6,800 level

Opening on a positive note and claiming the all new level of 6850 nifty exhibited stomach churning activity of trade in the second half of the session that concluded the April F&O series with gains of around a third of a percent for the day. The domestic index ended the near term series with a massive gain of over 199 points or 3 percent after gaining more than 6 percent in the March series. Nifty traded in a narrow 40-point range for most part of the day. The index started stooping as investors seemed cautious in the second half of the session on the last day of F&O series and also as the rupee weakened past the key 61 per dollar mark to hit a one-month low. However, extensive buying by funds and retail investors, thanks to encouraging Q4 earnings by blue-chip companies, helped the index to recover in the end.

After rising about seven per cent in March, the market has gained about three per cent in April series. In the index option segment, maximum OI in May series to be seen in the 7000-6900 calls and 6800-6700 puts indicating this as the trading range expectation. Meanwhile, many traders rolled over positions in the futures & options (F&O) segment from the April 2014 series to May 2014 series. The April 2014 F&O contracts expire today as the stock market remains closed on April 24, on account of voting in Mumbai. Sectorally, capital goods, telecom and metal stocks are witnessing high rollover of positions while stocks from the realty, media and infrastructure space are witnessing relatively low rolls into the May series.

India VIX - the gauge of underlying volatility in the market - has declined for second consecutive day as traders turned cautious on the last day of April F&O series. Falling India VIX indicates that traders have slowed down buying options contracts. The top gainers from the F&O segment were Dish TV India, Bata India and Bank of Baroda. The top losers were Biocon, India Cements and Cairn India.

Most of the sectoral indices on the NSE were settled in the green, CNX Media remained the major gainer, up 1.32% followed by CNX PSU Bank up 1.18%, Bank Nifty up by 1.04%, CNX Finance up by 0.80%, CNX Pharma up by 0.41%, CNX Metal up by 0.35%, CNX FMCG up by 0.32% and CNX Auto up by 0.23% while CNX Realty declined by 1.44%, CNX Energy down by 0.42% and CNX IT down by 0.08% remained the lone loser in the trade.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility declined by 6.66% and reached 31.1325. The 50-share CNX Nifty lost 25.45 points or 0.37% to settle at 6,840.80.

Nifty May 2014 futures closed at 6,899.15 on Wednesday at a premium of 58.35 points over spot closing of 6,840.80, while Nifty June 2014 futures ended at 6,920.60 at a premium of 79.80 points over spot closing. Nifty May futures saw an addition of 4.51 million (mn) units, taking the total outstanding open interest (OI) to 14.09 mn units. The near month May 2014 derivatives contract will expire on May 29, 2014.

From the most active contracts, HDFC Bank May 2014 futures traded at a premium of 7.10 points at 745.00 compared with spot closing of 737.90. The number of contracts traded was 29,260.

Reliance Industries May 2014 futures traded at a premium of 3.80 points at 970.60 compared with spot closing of 966.80. The number of contracts traded was 24,288.

ICICI Bank May 2014 futures traded at a premium of 6.30 points at 1306.00 compared with spot closing of 1299.70. The number of contracts traded was 28,300.

United Spirits May 2014 futures were at a premium of 19.20 points at 2845.60 compared with spot closing of 2826.40. The number of contracts traded was 23,688.

SBI May 2014 futures were at a discount of 5.70 points at 2068.30 compared with spot closing of 2074.00. The number of contracts traded was 23,027.

Among Nifty calls, 6,900 SP from the May month expiry was the most active call with addition of 0.64 million open interest. Among Nifty puts, 6500 SP from the May month expiry was the most active put with addition of 0.61 million open interest.

The maximum OI outstanding for Calls was at 7,000 SP (2.56 mn) and that for Puts was at 6,000 SP (2.41 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6861.35 --- Pivot Point 6841.05 --- Support --- 6820.50.

The Nifty Put Call Ratio (PCR) finally stood at 1.02 for May month contract. The top five scrips with highest PCR on OI were UltraTech Cements 1.37, Divi’s Lab 1.33, Hero Moto Corp 1.16, M&M 1.16 and BHEL 1.06.

Among most active underlying, SBI witnessed addition of 0.61 million of Open Interest in the May month futures contract, followed by L&T witnessing addition of 1.72 million of Open Interest in the May  month contract; ICICI Bank witnessed an addition of 2.25 million of Open Interest in the May month futures contract. Infy witnessed an addition of 1.05 million of Open Interest in the May month contract and MCDOWELL-N witnessed an addition of 2.09 million of Open Interest in the May month's future contract.