Nifty ends at record closing high above 7900 mark

After witnessing consolidation in previous two sessions, domestic index Nifty, recovered from the range-bound day of trade and finished at an all time closing high with a gain of 31 points or 0.40%. The index got off to a boisterous opening on sustained foreign capital inflows and covering up of short positions by speculators ahead of tomorrow's monthly expiry in the derivatives segment. However, it failed to breach the narrow 31-point range for most part of the day, ending the session above its crucial 7,900 mark with a gain of four tenths of a percent. Sentiments got a boost as rating agency Moody's expects the GDP to grow at 5.1% in the first quarter (April-June) of current fiscal, better than 4.7% clocked a year ago. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 364.72 crore on August 26, 2014.

Traders were seen piling up positions in Oil & Gas, Auto and Information Technology (IT) while selling was witnessed in Realty, Power and Infra sector stocks. Shares of defense equipment and manufacturers were trading higher by up to 6% after the government decided to allow foreign direct investment in defence sector. Besides, Metal shares rebounded after recent losses following the apex court's verdict on coal block allocations.  

As per the recent data available, the rollovers to the September F&O series so far seems to be in line with the average rollovers for the past few months. Sectorally, infrastructure, metal and oil & gas stocks are witnessing high rollover of positions while stocks from the automobile, finance and FMCG space are witnessing relatively low rolls into the September series.

The top gainers from the F&O segment were Havells India, Jain Irrigation Systems and the India Cements. On the other hand, the top losers were UCO Bank, DLF and Adani Ports and Special Economic Zone. In the index option segment, maximum OI continues to be seen in the 8000-7900 calls and 7700-7800 puts indicating the expected trading range. Meanwhile, India VIX - the gauge of underlying volatility in the market- has declined in today's session, which indicates that traders have slowdown buying options contracts. 

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 6.04% and reached 13.06. The 50-share CNX Nifty increased by 31.30 points or 0.40% to settle at 7,936.05. Nifty August 2014 futures closed at 7931.60 on Wednesday at a discount of 4.45 points over spot closing of 7,936.05, while Nifty September 2014 futures ended at 7972.85 at a premium of 36.80 points over spot closing. Nifty August futures saw contraction of 1.65 million (mn) units, taking the total outstanding open interest (OI) to 8.85 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 discount of 0.50 points at 836.25 compared with spot closing of 836.75. The number of contracts traded were 19,955.

DLF August 2014 futures traded flat compared with spot closing of 183.05. The number of contracts traded were 19,556.

Reliance Industries August 2014 futures traded at a discount of 2.00 points at 995.00 compared with spot closing of 997.00. The number of contracts traded were 30,345.

ICICI Bank August 2014 futures traded at a discount of 5.85 points at 1539.15 compared with spot closing of 1545.00. The number of contracts traded were 23,361.

Larsen & Toubro August 2014 futures traded at a discount of 1.20 points at 1502.90 compared with spot closing of 1504.10. The number of contracts traded were 17,741.

Among Nifty calls, 8000 SP from the August month expiry was the most active call with an addition of 0.68 million open interests. Among Nifty puts, 7,900 SP from the August month expiry was the most active put with a contraction of 1.17 million open interests. The maximum OI outstanding for Calls was at 8000 SP (1.09 mn) and that for Puts was at 7,900 SP (6.23 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7949.75 --- Pivot Point 7933.15 --- Support --- 7919.45.

The Nifty Put Call Ratio (PCR) finally stood at 1.32 for August month contract. The top five scrips with highest PCR on OI were Kotak Bank (2.47), Maruti Suzuki (2.11), Cipla (1.98), M&M (1.79) and Tata Motors (1.51). 

Among most active underlying, State Bank of India witnessed a contraction of 0.74 million of Open Interest in the August month futures contract, followed by ICICI Bank witnessing a contraction of 1 million of Open Interest in the August month contract; while DLF witnessed a contraction of 4.33 million of Open Interest in the August month futures contract, Reliance Industries witnessed a contraction 3.69 million of Open Interest in the August month contract and Tata Motors witnessed a contraction of 3.11 million of Open Interest in the August month's future contract.