Nifty continued its bull run for the fourth straight session and closed the exuberant day of trade with gains of over a percentage point on sustained buying by foreign funds and retail investors after the Finance Minister highlighted the government would take bold decisions in the forthcoming Budget to revive the economy. Besides, an uptick in manufacturing sector growth in June and signs of pick-up in auto sales amidst a firming trend in the global markets too added to the optimistic sentiments. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 856.35 crore on July 01, 2014. Moreover, concerns about India's macroeconomic situation have eased as Brent crude has come off 9-month high which it hit last month. After opening gap up and consolidating for initial part of the day, the National Stock Exchange’s 50-share CNX Nifty made a remarkable move in the latter half to end the session with hefty gains of over a one percent and scale fresh all-time highs. The rupee also rose to a nearly 3-week high of 59.68 against the dollar, boosting the sentiment. Meanwhile, Metal shares remained firm on the back of encouraging data from China. Further, capital goods shares continued their uptrend after a private survey showed that India's manufacturing sector growth accelerated in June.
In the near term, Nifty Futures and Options may witness high volatility on optimism over the first Budget of the Narendra Modi-led Government, while fresh buildup of positions in options segment suggests the benchmark index could gain about 3 to 4% by the Budget day from the current levels. In the index option segment, maximum OI concentration was seen in a wider range at 8000 strike price for call option, indicating it as resistance, and for put option, it is seen at 7500 strike price, suggesting this level as support for the market. The top gainers from the F&O Securities were Adani Ports, Adani Enterprises and Oracle Financial Services Software.
Most of the sectoral indices on the NSE were settled in the green, CNX Metal up by 1.93%, CNX Pharma up by 1.88%, CNX Auto up by 1.59%, CNX Finance up by 1.50%, CNX FMCG up by 1.29%, Bank Nifty up by 1.10%, CNX Energy up by 1.10%, CNX PSU Bank up by 0.34%, CNX Realty up by 0.22% and CNX IT up by 0.05% while CNX Media down by 0.04% was remained the lone loser in the trade.
The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 0.52% and reached 17.57. The 50-share CNX Nifty increased by 90.45 points or 1.18% to settle at 7,725.15. Nifty July 2014 futures closed at 7749.85 on Wednesday at a premium of 24.70 points over spot closing of 7,725.15, while Nifty August 2014 futures ended at 7790.00 at a premium of 64.85 points over spot closing. Nifty July futures saw an addition of 0.91 million (mn) units, taking the total outstanding open interest (OI) to 14.51 mn units. The near month derivatives contract will expire on July 31, 2014.
From the most active contracts, HDFC Bank July 2014 futures traded at a premium of 11.10 points at 849.80 compared with spot closing of 838.70. The number of contracts traded were 21,396.
SSLT July 2014 futures traded at a premium of 0.45 points at 310.40 compared with spot closing of 309.95. The number of contracts traded were 17,356.
Reliance Industries July 2014 futures traded at a premium of 9.50 points at 1027.20 compared with spot closing of 1017.70. The number of contracts traded were 28,274.
Tata Motors July 2014 futures were at a premium of 2.80 points at 456.25 compared with spot closing of 453.45. The number of contracts traded were 18,683.
Adani Ports July 2014 futures were at a discount of 3.15 points at 273.40 compared with spot closing of 270.25. The number of contracts traded were 30,073.
Among Nifty calls, 8000 SP from the July month expiry was the most active call with an addition of 0.52 million open interests. Among Nifty puts, 7,600 SP from the June month expiry was the most active put with an addition of 0.93 million open interests. The maximum OI outstanding for Calls was at 8000 SP (6.78 mn) and that for Puts was at 7,500 SP (4.16 mn). The respective Support and Resistance levels of Nifty are: Resistance 7690.83 --- Pivot Point 7711.62 --- Support --- 7690.83.
The Nifty Put Call Ratio (PCR) finally stood at 0.98 for July month contract. The top five scrips with highest PCR on OI were Maruti Suzuki (1.08), Just Dial (0.95), UBL (0.92), SUN TV (0.89) and Yes Bank (0.87).
Among most active underlying, United Spirits witnessed a contraction of 1.19 million of Open Interest in the June month futures contract, followed by Adani Ports witnessing an addition of 2.49 million of Open Interest in the June month contract; while Adani Enterprises witnessed an addition of 0.08 million of Open Interest in the June month futures contract, Sesa Sterlite witnessed an addition 1.62 million of Open Interest in the June month contract and Tata Motors witnessed an addition of 0.07 million of Open Interest in the June month's future contract.
