The fifty stock index -- Nifty -- ended the choppy day of trade with a marginal gain on Thursday. The index opened on a positive note as select buyers continued to add risky equities in their portfolio amidst hopes of stable government, but it erased all early gains and turned red in late morning trade on account of profit booking by funds and retail investors. Market, for rest of the session, see-saw around the neutral line as most of the traders remained in wait and watch mode ahead of the election results tomorrow. However, some value buying in dying hours helped market to end the session in the green, recapturing its crucial 7,100 mark. The market got a boost on encouraging monthly WPI data, which eased in-line with expectation at two -month low of 5.20% in month of April, 2014, as compared to 5.70% for the March and 4.77% during the corresponding month of the previous year. Healthy buying was observed in Consumer Durables, Power and Oil & Gas, while selling pressure was seen in Realty, Capital Goods and Metal counters. Moreover, shares of state-owned banks rallied after a RBI panel recommended that the government bring down its stake in these banks to below 50% to improve competitiveness and governance.
In tomorrow’s session, market is likely to exhibit high volatility and if the BJP-led NDA successful to form a stable government than nifty will see an up move of around 200 to 500 points. However, any disappointment would see the market react sharply on the downside around 400 to 700 points. Hopes of a favourable outcome in the elections triggered a renewed speculation in the derivative segment. Option segment witnessed a strong buying out of the money calls and puts suggesting traders bets on a wild move on either upside or downside. In the index option segment, maximum OI continues to be seen in the 7500-7400 calls and 6500-6400 puts indicating this is the trading range expectation. In today's session, the 7300, 7400 and 7700 Call strikes saw addition of 2.12, 15.26 and 12.84 lakh shares, respectively. On the other hand, 7000, 6800 and 6700 Put strikes saw addition of 13.38, 16.27 and 6.97 lakh shares, respectively. The top gainers from the F&O Securities were Apollo Tyres, Titan Company and ONGC, while Asian Paints, Indiabulls Real Estate and Tata Chemicals were the top losers.
Most of the sectoral indices on the NSE were settled in the red, CNX Media down by 1.64%, CNX Realty down by 1.11%, CNX Metal down by 0.64%, CNX PSU Bank down by 0.61%, CNX IT down by 0.38%, CNX Auto down by 0.33% and CNX Pharma down by 0.25% while CNX Energy up by 1.36%, CNX Finance up by 0.65%, CNX FMCG up by 0.45% and Bank Nifty up by 0.21% were the losers on the NSE sectoral indices.
The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 13.40% and reached 36.76. The 50-share CNX Nifty increased by 14.40 points or 0.20% to settle at 7,123.15. Nifty May 2014 futures closed at 7,143.10 on Thursday at a premium of 19.95 points over spot closing of 7,123.15, while Nifty June 2014 futures ended at 7,162.40 at a premium of 39.25 points over spot closing. Nifty May futures saw an addition of 0.91 million (mn) units, taking the total outstanding open interest (OI) to 17.93 mn units. The near month May 2014 derivatives contract will expire on May 29, 2014.
From the most active contracts, DLF May 2014 futures traded at a premium of 1.65 points at 160.45 compared with spot closing of 158.80. The number of contracts traded was 18,023.
NTPC May 2014 futures were at a premium of 1.05 points at 129.55 compared with spot closing of 128.50. The number of contracts traded was 17,606.
Reliance Industries May 2014 futures were at a discount of 10.65 points at 1047.35 compared with spot closing of 1058.00. The number of contracts traded was 27,440.
Tata Steel May 2014 futures traded at a premium of 1.05 points at 462.05 compared with spot closing of 461.00. The number of contracts traded was 35,910.
Apollo Tyre May 2014 futures traded at a premium of 1.40 points at 178.40 compared with spot closing of 177.00. The number of contracts traded was 27,085. Among Nifty calls, 7200 SP from the May month expiry was the most active call with an addition of 0.91 million open interest. Among Nifty puts, 6400 SP from the May month expiry was the most active put with an addition of 0.12 million open interest.
The maximum OI outstanding for Calls was at 7,200 SP (6.11 mn) and that for Puts was at 6,400 SP (5.22 mn). The respective Support and Resistance levels of Nifty are: Resistance 7156.28 --- Pivot Point 7119.42--- Support --- 7086.28.
The Nifty Put Call Ratio (PCR) finally stood at 0.83 for May month contract. The top five scrips with highest PCR on OI were Hero Moto Co 2.11, Mcleodruss 2.11, UPL 1.16, Siemens 1.16 and Tech Mahindra 1.15.
Among most active underlying, United Spirits witnessed addition of 1.13 million of Open Interest in the May month futures contract, followed by HDFC Bank witnessing an addition of 0.09 million of Open Interest in the May month contract; while Reliance Industries witnessed an addition of 0.21 million of Open Interest in the May month futures contract, ICICI Bank witnessed an addition of 1.18 million of Open Interest in the May month contract and Larsen & Toubro witnessed an addition of 0.39 million of Open Interest in the May month's future contract.
