Nifty ends above 7450 mark; achieves all time high closing

After witnessing some consolidation in the previous session, Nifty made an exuberant come back trading from strength to strength throughout the day, albeit some weakness early on, gained around a percent, claiming an all time high closing by the end of the session. The markets got off to a worrisome start early morning and quickly lost chunk of ground on weak global cues and on profit booking in frontline line blue-chip stocks. However, later the index made a wholesome recovery on persistent inflows of foreign funds and widespread buying by retail investors on hopes that the government will take steps to revive the country’s economic growth.

Further, the sentiments also got a boost after a news agency quoted that according to India Meteorological Department official the conditions have turned favourable for the monsoon onset in India. Stocks of insurance companies such as Reliance Capital and Bajaj Finserv continued to rise on increased buying activity mostly on reports that government is contemplating raising FDI cap in the sector. Moreover, Fertilizer companies were trading higher on hopes that the new government will soon clear its FY14 outstanding subsidy payments for the sector.

In the last few sessions, the F&O market internals point to long build-up in Nifty and Bank Nifty futures. The F&O rollover data for the May series also indicates that longs have been carried forward to the June F&O series. However, the put-call ratio open interest has remained range bound at lower levels of 0.67 to 0.95 levels on account of high activity seen on the call side. Looking at the index option data for June series maximum call OI is seen at 7500 followed by 7400 strike prices whereas maximum put OI is at 7200 & 7000 strike prices suggesting broader range is likely in between 7000-7500 levels.

Meanwhile, India VIX - the gauge of underlying volatility in the market - has declined for third consecutive day by 0.75% on Thursday, the lowest since March 09, showing traders expect fewer risks in the near term. The top gainers from F&O Securities were Havells India, BPCL and India Cements. The top losers were UCO Bank, M&M and Crompton Greaves.

Most of the sectoral indices on the NSE were settled in the green, CNX Metal up by 3.62%, CNX Energy up by 1.98%, CNX FMCG up by 1.44%, CNX IT up by 1.36%, CNX Auto up by 0.91%, CNX Realty up by 0.78%, CNX Media up by 0.79%, CNX PSU Bank up by 0.26%, CNX Finance up by 0.16% and CNX Pharma up by 0.11% while Bank Nifty declined by 0.33% remained the lone loser in the trade.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 0.75% and reached 15.44. The 50-share CNX Nifty increased by 71.85 points or 0.97% to settle at 7,474.10. Nifty June 2014 futures closed at 7486.75 on Thursday at a premium of 12.65 points over spot closing of 7,474.10, while Nifty July 2014 futures ended at 7520.30 at a premium of 46.20 points over spot closing. Nifty June futures saw contraction of 1.07 million (mn) units, taking the total outstanding open interest (OI) to 14.04 mn units. The near month June 2014 derivatives contract will expire on June 26, 2014.

From the most active contracts, Reliance Communications June 2014 futures were at a premium of 0.45 points at 147.15 compared with spot closing of 146.70. The number of contracts traded was 20,882.

Hindalco Industries June 2014 futures were at a discount of 0.20 points at 170.30 compared with spot closing of 170.50. The number of contracts traded was 22,439.

ITC June 2014 futures were at a premium of 1.45 points at 334.55 compared with spot closing of 333.10. The number of contracts traded was 20,159.

Tata Motors June 2014 futures traded at a premium of 1.15 points at 436.00 compared with spot closing of 434.85. The number of contracts traded was 23,412.

Reliance Industries June 2014 futures traded at a premium of 1.80 points at 1093.90 compared with spot closing of 1092.10. The number of contracts traded was 36,201. Among Nifty calls, 7,500 SP from the June month expiry was the most active call with contraction of 0.07 million open interest. Among Nifty puts, 7,400 SP from the  June month expiry was the most active put with contraction of 0.64 million open interest. The maximum OI outstanding for Calls was at 7,500 SP (5.88 mn) and that for Puts was at 7,000 SP (4.88 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7519.03 --- Pivot Point 7439.77 --- Support --- 7394.83.

The Nifty Put Call Ratio (PCR) finally stood at 0.95 for June month contract. The top five scrips with highest PCR on OI were Mcleod Russel India with 1.73, Hero MotoCorp with 1.37, Tata Steel with 1.12, UltraTech Cement with 1.07, Axis Bank with 1.03.

Among most active underlying, Tata Steel witnessed contraction of 0.25 million of Open Interest in the June month futures contract, followed by Reliance Capital witnessing an addition of 0.61 million of Open Interest in the June  month contract; while State Bank of India witnessed contraction of 0.14 million of Open Interest in the June month futures contract, Reliance Infrastructure witnessed contraction 0.25 million of Open Interest in the June month contract and Sesa Sterlite witnessed contraction of 10.68 million  of Open Interest in the June month's future contract.