Nifty manages to extend gains on Tuesday despite volatility

Indian markets consolidated on Tuesday after witnessing bull run in last couple of sessions. Though, Nifty had once again made a strong start but traders opted to book profit at the higher levels and dragged the index lower. In the very initial trade the indices entered the red zone for a couple of time, though recovery followed and in final hours the index once again made strong attempt after the BJP’s PM designate Narendra Modi announced his priorities, after being elected leader of Party’s Parliamentary board.Though, near month Nifty May 2014 futures were at 7300.60, at a premium of 25.10 points over spot closing of 7275.50. But the turnover on NSE's futures & options (F&O) segment declined to Rs 199274.61 crore from Rs 251736.98 crore on Monday, 19 May 2014 till the last available data. The Nifty May contract witnessed contraction of 0.28 million of open interest. On the same time Nifty June futures contract witnessed addition of 0.32 million open interest.

Nifty May 2014 futures closed at 7300.60 on Tuesday at a premium of 25.10 points over spot closing of 7,275.50, while Nifty June 2014 futures ended at 7324.45 at a premium of 48.95 points over spot closing. Nifty May futures saw contraction of 0.28 million (mn) units, taking the total outstanding open interest (OI) to 21.62 mn units. The near month May 2014 derivatives contract will expire on May 29, 2014.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 6.77% and reached 19.23. The 50-share CNX Nifty increased by 11.95 points or 0.16% to settle at 7,275.50.

From the most active contracts, DLF May 2014 futures traded at a premium of 1.10 points at 184.60 compared with spot closing of 183.50. The number of contracts traded was 28,907.

BHEL May 2014 futures were at a premium of 2.05 points at 278.30 compared with spot closing of 276.25. The number of contracts traded was 27,291.

SSLT May 2014 futures were at a discount of 0.15 points at 245.85 compared with spot closing of 246.00. The number of contracts traded was 24,437.

Tata Steel May 2014 futures traded at a premium of 1.75 points at 468.65 compared with spot closing of 466.90. The number of contracts traded was 26,736.

Reliance Industries May 2014 futures traded at a premium of 5.75 points at 1085.75 compared with spot closing of 1,080.00. The number of contracts traded was 28,731.

Among Nifty calls, 8,000 SP from the May month expiry was the most active call with contraction of 0.05 million open interest. Among Nifty puts, 7,000 SP from the May month expiry was the most active put with contraction of 0.12 million open interest. 

The maximum OI outstanding for Calls was at 8,000 SP (6.66 mn) and that for Puts was at 7,000 SP (4.77mn).  The respective Support and Resistance levels of Nifty are: Resistance 7336.87 --- Pivot Point 7292.28--- Support --- 7230.92.

The Nifty Put Call Ratio (PCR) finally stood at 0.80 for May month contract. The top five scrips with highest PCR on OI were Ultra Cement 1.63, Mcleodruss 1.59, PNB 1.42, Hero Moto Co 1.41, and Maruti 1.39.

Among most active underlying, United Spirits witnessed  an addition of 0.01 million of Open Interest in the May month futures contract, followed by HDFC Bank witnessing   an addition  of 0.03 million of Open Interest in the May  month contract; while Reliance Industries witnessed  an addition  of 0.99 million of Open Interest in the May month futures contract, ICICI Bank witnessed  an addition of 0.68 million of Open Interest in the May month contract and SBI witnessed an addition  of 0.22 million  of Open Interest in the May month's future contract.