Nifty gains marginally after previous session’s drubbing

After witnessing drubbing in previous session, domestic index Nifty heaved a sigh of relief garnering a marginal gain in Thursday’s trade. Global cues supported the domestic bourses as most of the Asian equity indices ended in the positive terrain after China's trade improved and Federal Reserve Chair Janet Yellen vowed low interest rates would continue until the U.S. job market is healthy.  The market opened higher on the back of strong global cues, recording intraday high in late morning session. Afterwards, profit booking emerged at higher levels and the index started to drift lower till early noon. Market, for rest of the session, see-saw around the neutral line as investors remained sideways in the absence of any significant trigger at domestic front. However, some value buying in dying hours helped market to end the session in the green, recapturing its crucial 6,650 mark.  Healthy buying was observed in Consumer Durables, Bankex and Auto counters, while selling pressure was seen in Realty, FMCG and Healthcare counters

Meanwhile, slow-down in inflows from foreign institutional investors and profit booking by domestic investors are likely to keep the market subdued till election results are out.  In the index option segment, maximum OI continues to be seen in the 7000-6800 calls and 6500-6400 puts indicating this is the trading range expectation. In today's session, the 7000, 7100 and 7200 Call strikes saw addition of 6.52, 3.46 and 1.04 lakh shares, respectively. On the other hand, 6600 and 6400 Put strikes saw addition of 2.44 and 1.08 lakh shares, respectively. Meanwhile, some traders exited from 6800 and 6900 calls on the back of profit booking.

The top gainers from the F&O Securities were Arvind, Bharat Heavy Electricals (BHEL) and Jain Irrigation Systems. The top losers were Union Bank of India, UPL and Just Dial. Among the top gainers, BHEL futures ended the trade up by 4.01% after the company said it has successfully commissioned a 126 megawatts gas turbine power generating unit in Oman for Petroleum Development Oman. While Among the top losers, Union Bank of India ended the trade with a cut of 8.27% after reporting a 26.66% decline in net profit to Rs 578.96 crore for the quarter ended March 31, 2014.

Most of the sectoral indices on the NSE were settled in the red, CNX FMCG down by 0.87%, CNX Realty down by 0.85%, CNX Pharma down by 0.28%, CNX Media down by 0.14%, CNX Energy down by 0.12% and CNX PSU Bank down by 0.04% while Bank Nifty up by 0.77%, CNX Auto up by 0.64%, CNX Finance up by 0.58%, CNX Metal up by 0.21%  and CNX IT up by 0.19% were the gainers on the NSE sectoral indices.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 2.04% and reached 34.30. The 50-share CNX Nifty increased by 17.35 points or 0.26% to settle at 6,669.90.

Nifty May 2014 futures closed at 6,680.95 on Thursday at a premium of 21.10 points over spot closing of 6,659.85, while Nifty June 2014 futures ended at 6,699.25 at a premium of 39.40 points over spot closing. Nifty May futures saw contraction of 0.21 million (mn) units, taking the total outstanding open interest (OI) to 13.63 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 8.75 points at 726.70 compared with spot closing of 717.95. The number of contracts traded was 10,414.

Tata Steel May 2014 futures traded at a premium of 3.10 points at 404.60 compared with spot closing of 401.50. The number of contracts traded was 11,074.

Reliance Industries May 2014 futures were at a discount of 6.60 points at 955.40 compared with spot closing of 962.00. The number of contracts traded was 11,683.

Bank of India May 2014 futures were at a premium of 1.95 points at 234.15 compared with spot closing of 232.20. The number of contracts traded was 9,709.

Union Bank of India May 2014 futures traded at a premium of 0.55 points at 136.00 compared with spot closing of 135.45. The number of contracts traded was 19,728Among Nifty calls, 7000 SP from the May month expiry was the most active call with an addition of 0.50 million open interest.Among Nifty puts, 6400 SP from the May month expiry was the most active put with  an addition of 0.09 million open interest.The maximum OI outstanding for Calls was at 7,000 SP (4.95 mn) and that for Puts was at 6,400 SP (4.24 mn). The respective Support and Resistance levels of Nifty are: Resistance 6685.98--- Pivot Point 6662.27 --- Support --- 6636.13.

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 UPL 1.13, Tech Mahindra 1.08, RECL 0.98, Ultra Cement 0.95, and DR Reddy 0.93.

Among most active underlying, Tata Steel witnessed contraction of 0.01 million  of Open Interest in the May month futures contract, followed by HDFC Bank witnessing  an addition of 1.06 million of Open Interest in the May  month contract; while Reliance Industries witnessed  an addition  of 0.05 million of Open Interest in the May month futures contract, State Bank of India witnessed  contraction of 0.08 million of Open Interest in the May month contract and finally, Aurobindo Pharma witnessed contraction  of 0.06 million  of Open Interest in the May month's future contract.