Nifty manages a close in green for third straight session

Nifty ended in green for third straight session as a weak rupee boosted technology stocks such as Tata Consultancy Services although broader gains were capped after disappointing earnings from blue-chips including Bharat Heavy Electricals. After a cautious opening, nifty showed some strength in morning trades, but the sentiments turned pessimistic in afternoon trades and index start drifting lower, however the market regained its momentum in the final hour of trade and finished the day gaining over one tenth of a percent. Sentiment on the street improved after global rating agency Moody’s estimated that the country’s GDP will grow by 5 percent this year and accelerate further in 2015. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 370.83 crore on August 12, 2014. However, weak industrial growth in June and rising consumer price inflation in July weighed on investor sentiment. Traders were seen piling positions in FMCG, IT and Healthcare while selling was witnessed in Realty, Capital Goods and Consumer Durables sector stocks.

After three day’s surge, nifty may show some amount of correction in near future as rich valuations and global uncertainties could prompt investors to book some profits. Besides, showing signs of sluggishness in the economy, growth rate of industrial production slowed to 3.4% in June, as against 5% in May, mainly due to lower output of consumer goods. In the index option segment, maximum OI continues to be seen in the 8000-7800 calls and 7600-7500 puts indicating this is the trading range expectation.

The top gainers from the F&O segment were Apollo Hospitals Enterprise, Dabur India and HCL Technologies. On the other hand, the top losers were Unitech, Jaiprakash Associates and Indiabulls Real Estate. Meanwhile, India VIX - the gauge of underlying volatility in the market - has risen in today's session as traders turned cautious after the benchmark breaches psychological level of 7700.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 2.19% and reached 13.76. The 50-share CNX Nifty increased by 12.50 points or 0.16% to settle at 7,739.55. Nifty August 2014 futures closed at 7,746.35 on Wednesday at a premium of 6.80 points over spot closing of 7,739.55, while Nifty September 2014 futures ended at 7,779.55 at a premium of 40.00 points over spot closing. Nifty August futures saw an addition of 1.27 million (mn) units, taking the total outstanding open interest (OI) to 14.13 mn units. The near month derivatives contract will expire on August 28, 2014.

From the most active contracts, JP Associates August 2014 futures traded at a premium of 0.35 points at 53.75 compared with spot closing of 53.40. The number of contracts traded were 16,955.

BHEL August 2014 futures traded at a discount of 3.35 points at 206.25 compared with spot closing of 209.60. The number of contracts traded were 19,710.

HDFC Bank August 2014 futures traded at a premium of 1.85 points at 815.80 compared with spot closing of 813.95. The number of contracts traded were 14,900.

Reliance Industries August 2014 futures traded at a premium of 2.80 points at 992.30 compared with spot closing of 989.50. The number of contracts traded were 21,508.

Tata Steel August 2014 futures traded at a discount of 0.80 points at 536.35 compared with spot closing of 537.15. The number of contracts traded were 19,293.Among Nifty calls, 7800 SP from the August month expiry was the most active call with an addition of 0.02 million open interests. Among Nifty puts, 7,700 SP from the August month expiry was the most active put with an addition of 1.01 million open interests. The maximum OI outstanding for Calls was at 8000 SP (7.26 mn) and that for Puts was at 7,600 SP (7.52 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7765.87 --- Pivot Point 7730.78 --- Support --- 7704.47.

The Nifty Put Call Ratio (PCR) finally stood at 1.15 for August month contract. The top five scrips with highest PCR on OI were Kotak Bank (1.40), M&M (1.40), Maruti Suzuki (1.29), Sun Pharma (1.25) and Ranbaxy (1.23). 

Among most active underlying, State Bank of India witnessed an addition of 0.06 million of Open Interest in the August month futures contract, followed by Tata Steel witnessing an addition of 0.49 million of Open Interest in the August month contract; while Bharat Heavy Electricals witnessed an addition of 2.45 million of Open Interest in the August month futures contract, Jaiprakash Associates witnessed a contraction 0.31 million of Open Interest in the August month contract and Tata Motors witnessed an addition of 1.05 million of Open Interest in the August month's future contract.