Nifty ends tad below 7900 mark; achieves all time high closing

The fifty stock index -- Nifty -- rose to their second consecutive record-breaking highs on Tuesday on robust buying by foreign funds coupled with firming trend overseas. After gap up opening, nifty showed some strength in early morning trades however, it failed to breach the narrow 38-point range for most part of the day, ending the session tad below its crucial 7,900 mark with a gain of three tenths of a percent. Sentiment on the street improved on firm global cues coupled with the appreciation in rupee value against the dollar and weak crude prices. Sentiments were also on optimistic mood as according to Nielsen global survey, India has touched the top spot in consumer confidence among 60 countries. During April-June quarter of 2014, India’s ranking increased seven index points to 128. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 473.42 crore on August 18, 2014. However, HSBC report which highlighted that amidst all the bullish calls on the Indian markets, it maintains its neutral weight on India, weighed on the sentiment. According to HSBC, the valuations still look high and foreign mutual funds are still very overweight on Indian shares.

Sectorally, the day was marked by huge gains in Auto and Realty sector, with CNX Auto gaining 2.46%, while the CNX Realty gained 1.57%. CNX Media too gained 0.70%. On the other hand, CNX IT was down by 0.51%, while CNX Finance lost 0.18%.

The top gainers from the F&O segment were Ashok Leyland, Apollo Hospitals Enterprise and Adani Ports. On the other hand, the top losers were Housing Development Finance Corporation, Indraprastha Gas and TCS. In the index option segment, maximum OI continues to be seen in the 8000-7900 calls and 7700-7800 puts indicating this is the trading range expectation. Meanwhile, India VIX - the gauge of underlying volatility in the market - has risen in today's session, which indicates that market participants expect uncertainty going ahead.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 2.98% and reached 13.90. The 50-share CNX Nifty increased by 23.25 points or 0.30% to settle at 7,897.50. Nifty August 2014 futures closed at 7909.65 on Tuesday at a premium of 12.15 points over spot closing of 7,897.50, while Nifty September 2014 futures ended at 7940.55 at a premium of 43.05 points over spot closing. Nifty August futures saw an addition of 0.19 million (mn) units, taking the total outstanding open interest (OI) to 15.22 mn units. The near month derivatives contract will expire on August 28, 2014.

From the most active contracts, Reliance Industries August 2014 futures traded at a premium of 5.60 points at 1012.70 compared with spot closing of 1,007.10. The number of contracts traded were 23,266.

Tata Motors August 2014 futures traded at a discount of 1.95 points at 518.65 compared with spot closing of 520.60. The number of contracts traded were 20,367.

ONGC August 2014 futures traded at a premium of 2.60 points at 434.85 compared with spot closing of 432.25. The number of contracts traded were 16,761.

ICICI Bank August 2014 futures traded at a discount of 2.50 points at 1541.30 compared with spot closing of 1543.80. The number of contracts traded were 24,371.

Yes Bank August 2014 futures traded at a premium of 0.80 points at 578.40 compared with spot closing of 577.60. The number of contracts traded were 13,509. Among Nifty calls, 8000 SP from the August month expiry was the most active call with an addition of 1.14 million open interests. Among Nifty puts, 7,800 SP from the August month expiry was the most active put with an addition of 1.00 million open interests. The maximum OI outstanding for Calls was at 8000 SP (8.42 mn) and that for Puts was at 7,600 SP (7.16 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7916.98--- Pivot Point 7899.07--- Support --- 7879.59.

The Nifty Put Call Ratio (PCR) finally stood at 1.42 for August month contract. The top five scrips with highest PCR on OI were M&M (1.88), Maruti Suzuki (1.66), Tata Motors (1.45), Sun Pharma (1.44) and India Cement (1.41). 

Among most active underlying, State Bank of India witnessed a contraction of 0.09 million of Open Interest in the August month futures contract, followed by Tata Motors witnessing an addition of 0.03 million of Open Interest in the August month contract; while ICICI Bank witnessed an addition of 0.10 million of Open Interest in the August month futures contract, Tata Steel witnessed a contraction 0.23 million of Open Interest in the August month contract and Yes Bank  witnessed an addition of 0.25 million of Open Interest in the August month's future contract.