Nifty ends above 7950 mark; achieves all time high closing

The fifty stock index -- Nifty -- continued its northward journey for second consecutive day on Thursday and finished the volatile day of trade at an all time closing high with a gain of 18 points or 0.23%, on sustained buying by funds and retail investors on optimism about an improving economy and expectations Prime Minister Narendra Modi will usher a period of significant fiscal and economic reforms. The market sentiment was also boosted as Foreign investors, who have been key drivers of the market rally this year, bought Indian shares worth $48 million on Wednesday, marking a ninth consecutive session of purchases and bringing their total net inflows for the year to $12.95 billion. Sentiments further got some support as the Reserve Bank of India (RBI) eased norms to refinance external commercial borrowings (ECB). However, gains remained capped on Moody’s report stating India’s sovereign ratings are constrained by persistently high inflation that is weighing on an otherwise promising economic recovery. Besides, some traders remained on the sidelines ahead of Q1FY15 GDP data, which is scheduled to be released tomorrow.

After gap up opening, nifty showed some strength in early morning trades, however it failed to breach the narrow 29-point range for most part of the day, ending the session above its crucial 7,950 mark. Traders were seen piling up positions in Capital Goods, Oil & Gas and FMCG while selling was witnessed in Realty, Metal and IT sector stocks.

Now the August F&O series has ended, traders will be keeping a close watch on tomorrow’s Q1FY15 GDP data and possibly even Current Account Deficit (CAD) numbers later this week. Many traders rolled over positions in the futures & options (F&O) segment from the August 2014 series to September 2014 series. Sectorally, metals, oil & gas and pharma stocks are witnessing high rollovers of positions while stocks from the FMCG, automobile and finance space are witnessing relatively low rollovers into the September series.

The top gainers from the F&O segment were Tata Communications, Bharat Heavy Electricals and NHPC. On the other hand, the top losers were Jindal Steel & Power, DLF and Tata Power. In the index option segment, maximum OI continues to be seen in the 8100-8000 calls and 7900-7800 puts indicating the expected trading range.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 0.04% and reached 13.06. The 50-share CNX Nifty increased by 18.80 points or 0.23% to settle at 7,954.35. Nifty September 2014 futures closed at 7986.40 on Thursday at a premium of 32.05 points over spot closing of 7,954.35, while Nifty October 2014 futures ended at 8020.85 at a premium of 66.50 points over spot closing. Nifty September futures saw an addition of 5.08 million (mn) units, taking the total outstanding open interest (OI) to 15.95 mn units. The near month derivatives contract will expire on September 25, 2014.

From the most active contracts, HDFC Bank September 2014 futures traded at a premium of 8.90 points at 849.85 compared with spot closing of 840.95. The number of contracts traded were 17,322.

Reliance Industries September 2014 futures traded at a premium of 6.10 points at 1006.10 compared with spot closing of 1000.00. The number of contracts traded were 40,455.

Larsen & Toubro September 2014 futures traded at a premium of 2.45 points at 1534.85 compared with spot closing of 1532.40. The number of contracts traded were 18,262.

ICICI Bank September 2014 futures traded at a premium of 5.15 points at 1558.00 compared with spot closing of 1552.85. The number of contracts traded were 21,406.

SBI September 2014 futures traded at a premium of 14.20 points at 2475.70 compared with spot closing of 2461.50. The number of contracts traded were 22,273.

Among Nifty calls, 8000 SP from the September month expiry was the most active call with an addition of 1.09 million open interests. Among Nifty puts, 7,900 SP from the September month expiry was the most active put with a contraction of 1.15 million open interests. The maximum OI outstanding for Calls was at 8100 SP (3.27 mn) and that for Puts was at 7,900 SP (3.78 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 0.96 for September month contract. The top five scrips with highest PCR on OI were Shriram Transport Finance Company (9.60), Apollo Hospital (3.33), Sun TV (2.06), Cipla (1.46) and Syndicate Bank (1.25). 

Among most active underlying, State Bank of India witnessed an addition of 1.29 million of Open Interest in the September month futures contract, followed by Reliance Industries witnessing an addition of 5.53 million of Open Interest in the September month contract; while ICICI Bank witnessed an addition of 1.75 million of Open Interest in the September month futures contract, Tata Motors witnessed an addition 4.16 million of Open Interest in the September month contract and Tata Steel witnessed an addition of 5.14 million of Open Interest in the September month's future contract.