Nifty closes at all-time high level after strong GDP data

Boisterous Nifty exhibited an enthusiastic performance on Monday, by rallying about one percentage point and breaking an important psychological level of 8000 in its northbound journey. Sentiments turned bullish as participants cheer better-than-expected economic growth in the June quarter, which raised hopes the economy was back on track after two years of sluggish growth. For the quarter ended June this year, India's gross domestic product (GDP) grew at a nine-quarter high of 5.7 per cent, compared with 4.6 per cent in the previous quarter. Market sentiments also buoyed by manufacturing PMI which came in at 52.4 indicating expansion in operating conditions supported by strong expansions in total new orders and business from abroad. Besides, the global cues too remained supportive, the Asian markets ended mostly in green riding on the back of another record high on Wall Street and expectations of stimulus in China after its manufacturing growth slowed, however the European markets turned lower after a green start as Euro-area manufacturing activity slowed more than initially estimated in August. Back home, some support also came with Reserve Bank of India Governor Raghuram Rajan’s statement that India is now better prepared to handle the impact of any US interest rate increase because of signs its economy is improving.

After trading record high and conquering 8000 mark, nifty would be range-bound in the near term and may correct around 5 percent over the next 2 to 3 months as the pace of reforms is slower than the market estimate. However, the cyclical recovery coupled with faster project clearances and liberalisation of FDI would lead to a revival in the investment cycle in long run.

The top gainers from the F&O segment were Unitech, Apollo Tyres and Andhra Bank. On the other hand, the top losers were Just Dial, Dabur India and Havells India. In the index option segment, maximum OI continues to be seen in the 8200-8100 calls and 7900-7800 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 3.54% and reached 13.53. The 50-share CNX Nifty increased by 73.35 points or 0.92% to settle at 8,027.70. Nifty September 2014 futures closed at 8069.45 on Monday at a premium of 41.75 points over spot closing of 8,027.70, while Nifty October 2014 futures ended at 8104.60 at a premium of 76.90 points over spot closing. Nifty September futures saw an addition of 0.38 million (mn) units, taking the total outstanding open interest (OI) to 16.34 mn units. The near month derivatives contract will expire on September 25, 2014.

From the most active contracts, DLF September 2014 futures traded at a premium of 1.40 points at 181.05 compared with spot closing of 179.65. The number of contracts traded were 12,035.

Reliance Industries September 2014 futures traded at a premium of 5.85 points at 1022.25 compared with spot closing of 1016.40. The number of contracts traded were 34,629.

Hindalco Industries September 2014 futures traded at a premium of 1.05 points at 176.35 compared with spot closing of 175.30. The number of contracts traded were 13,442.

Jindal Steel & Power September 2014 futures traded at a premium of 1.95 points at 249.85 compared with spot closing of 247.90. The number of contracts traded were 30,654.

Tata Steel September 2014 futures traded at a premium of 4.45 points at 528.10 compared with spot closing of 523.65. The number of contracts traded were 15,920.

Among Nifty calls, 8100 SP from the September month expiry was the most active call with an addition of 0.40 million open interests. Among Nifty puts, 8,000 SP from the September month expiry was the most active put with a contraction of 1.75 million open interests. The maximum OI outstanding for Calls was at 8200 SP (4.69 mn) and that for Puts was at 7,900 SP (4.36 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7996.13 --- Pivot Point 8015.57--- Support --- 7996.13.

The Nifty Put Call Ratio (PCR) finally stood at 1.01 for September month contract. The top five scrips with highest PCR on OI were Apollo Hospital (2.50), Sun TV (1.95), Maruti Suzuki (1.23), Hero MotoCorp (1.19) and Kotak Bank (1.17). 

Among most active underlying, Reliance Industries witnessed an addition of 0.84 million of Open Interest in the September month futures contract, followed by State Bank of India witnessing an addition of 0.39 million of Open Interest in the September month contract; while Tata Steel witnessed an addition of 0.69 million of Open Interest in the September month futures contract, Jindal Steel & Power witnessed an addition 1.03 million of Open Interest in the September month contract and ICICI Bank witnessed an addition of 0.53 million of Open Interest in the September month's future contract