Nifty ends July F&O series with a gain of over 3%

The domestic index CNX Nifty finished the July F&O series with a gain of about 228 points or three percent. However, today, nifty completed the choppy day of trade with a cut of around a percent on the back of sharp losses in Power and Bankex stocks and volatility due to the expiry of derivative contracts. On the other hand, the gains in realty, metal and Healthcare stocks capped the losses to some extent. Sentiments got some support as National Statistical Commission Chairman Pronob Sen’s statement that the country’s growth can enhance to 6.5 percent in the current fiscal.

After a subdued opening, Nifty extended its downfall in early deals on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 381.66 crore on July 30, 2014. During the trade, nifty failed to show any kind of fervor due to lack of encouraging leads. Moreover, the Index breached its crucial 7,550 mark in early afternoon trades, with heavy selling in stocks like L&T, Hindalco Industries, Wipro and BHEL. In the final hour of trade, the index witnessed a steep fall of about 35 points as European counterparts drifted downward after a positive start. Finally, Nifty ended the sluggish session of trade with a cut of about a percent point below its crucial 7,750 mark.

Now the July F&O series has ended, traders will be keeping a close watch on the RBI monetary policy scheduled on August 5, 2014. Many traders rolled over positions in the futures & options (F&O) segment from the July 2014 series to August 2014 series. Sectorally, metals, capital goods and FMCG stocks were witnessing high rollover of positions while stocks from the telecom, automobile and power space were witnessing relatively low rolls into the August series.

Looking at the index option data for August series maximum call OI is seen at 7800 followed by 8000 strike prices whereas maximum put OI is at 7600 & 7500 strike prices suggesting broader range is likely in between 7500-8000 levels. The volatility index was down to sub-14 levels as market remained range-bound, a breakout from the range can see VIX surging back to 17-18 levels.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 0.47% and reached 13.82. The 50-share CNX Nifty decreased by 70.10 points or 0.90% to settle at 7,721.30. Nifty August 2014 futures closed at 7750.55 on Thursday at a premium of 29.25 points over spot closing of 7,721.30, while Nifty September 2014 futures ended at 7782.00 at a premium of 60.70 points over spot closing. Nifty August futures saw an addition of 3.27 million (mn) units, taking the total outstanding open interest (OI) to 13.21 mn units. The near month derivatives contract will expire on August 28, 2014.

From the most active contracts, HDFC Bank August 2014 futures traded at a premium of 9.80 points at 840.60 compared with spot closing of 830.80. The number of contracts traded were 21,828.

Reliance Industries August 2014 futures traded at a premium of 7.05 points at 1012.05 compared with spot closing of 1005.00. The number of contracts traded were 40,943.

ICICI Bank August 2014 futures traded at a premium of 8.95 points at 1480.15 compared with spot closing of 1471.20. The number of contracts traded were 32,538.

L&T August 2014 futures traded at a discount of 5.45 points at 1497.55 compared with spot closing of 1503.00. The number of contracts traded were 25,767.

SBI August 2014 futures traded at a premium of 18.25 points at 2454.25 compared with spot closing of 2436.00. The number of contracts traded were 27,225.Among Nifty calls, 8000 SP from the August month expiry was the most active call with an addition of 1.34 million open interests. Among Nifty puts, 7,600 SP from the August month expiry was the most active put with an addition of 0.80 million open interests. The maximum OI outstanding for Calls was at 8000 SP (4.03 mn) and that for Puts was at 7,300 SP (4.85 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7771.72 --- Pivot Point 7741.43 --- Support --- 7691.02.

The Nifty Put Call Ratio (PCR) finally stood at 1.04 for August month contract. The top five scrips with highest PCR on OI were Dr. Reddy's Laboratories (1.82), Titan (1.76), Bata India (1.75), IndusInd Bank (1.54) and Havells (1.33).

Among most active underlying, ICICI Bank witnessed a contraction of 2.40 million of Open Interest in the August month futures contract, followed by State Bank of India witnessing a contraction of 0.96 million of Open Interest in the August month contract; while Tata Steel witnessed a contraction of 4.07 million of Open Interest in the August month futures contract, Reliance Industries witnessed a contraction 5.52 million of Open Interest in the August month contract and Larsen & Toubro witnessed an addition of 2.51 million of Open Interest in the August month's future contract.