Nifty closes above 8100 for first time ever

Nifty slips from day’s high but still manages to end above 8100 level first time in its 20-year history, owing to positive global cues and sustained FII inflows. The market buoyancy came on the back of data that showed a surplus on balance of payments for the third quarter on the trot, to go with encouraging 5.7% growth in GDP for the quarter ended June - the highest in the last nine quarters. However, gains remained capped as Growth in services, which dominate India's economy, expanded at its weakest rate in three months in August. Besides, some pressure was seen on the index as India's ranking on a global competitiveness index fell 11 notches to 71 in 2014-15 against 60 a year earlier. Meanwhile, gains at Nifty were led by stocks belonging from information technology (IT), Realty and Capital Goods counters. On the flip side, stocks from FMCG, Bankex and Power counters witnessing brutal thrashing, were restricting further upside of the market. After gap up opening, nifty showed some strength in morning trades, but the sentiments turned pessimistic in afternoon trades and index started drifting lower, however the market regained its momentum in the final half hour of trade and finished the day gaining over three tenths of a percent, more importantly above the 8100 level.

Despite overall optimism, investors remain cautious considering the fact that nifty had already rallied a lot in a short time and most of the rally was based on hopes of a turnaround in the economy. The market may probably correct by 5% to 10% in near term. However, every dip could be taken as an opportunity to buy as a large number of investors do not have enough of Indian stocks and are still waiting in the wings to make disproportionate allocations to equities as an asset class. 

The top gainers from the F&O segment were UPL, HDIL and JSW Energy. The top losers were Jaiprakash Associates, Jaiprakash Power Ventures and Adani Power. In the index options segment, maximum OI continues to be seen in the 8200-8100 calls and 8000-7900 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 slowed down buying options contracts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 0.41% and reached 13.39. The 50-share CNX Nifty increased by 31.55 points or 0.39% to settle at 8,114.60. Nifty September 2014 futures closed at 8140.45 on Wednesday at a premium of 25.85 points over spot closing of 8,114.60, while Nifty October 2014 futures ended at 8180.90 at a premium of 66.30 points over spot closing. Nifty September futures saw an addition of 0.20 million (mn) units, taking the total outstanding open interest (OI) to 16.89 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 5.65 points at 862.65 compared with spot closing of 857.00. The number of contracts traded were 14,557.

Reliance Industries September 2014 futures traded at a premium of 3.10 points at 1035.45 compared with spot closing of 1032.35. The number of contracts traded were 32,748.

Tata Steel September 2014 futures traded at a premium of 1.35 points at 529.25 compared with spot closing of 527.90. The number of contracts traded were 19,516.

Reliance Capital September 2014 futures traded at a discount of 4.65 points at 545.20 compared with spot closing of 549.85. The number of contracts traded were 13,916.

Yes Bank September 2014 futures traded at a discount of 5.30 points at 622.70 compared with spot closing of 628.00. The number of contracts traded were 13,734.

Among Nifty calls, 8200 SP from the September month expiry was the most active call with an addition of 0.22 million open interests. Among Nifty puts, 8,000 SP from the September month expiry was the most active put with a contraction of 0.94 million open interests. The maximum OI outstanding for Calls was at 8200 SP (4.79 mn) and that for Puts was at 8,000 SP (6.67 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8140.25 --- Pivot Point 8116.25--- Support --- 8090.60.

The Nifty Put Call Ratio (PCR) finally stood at 1.18 for September month contract. The top five scrips with highest PCR on OI were Sun TV (1.84), Apollo Hospital (1.67), Hero MotoCorp (1.25), M&M (1.16) and Colgate Palmolive (1.14). 

Among most active underlying, Infosys witnessed an addition of 0.10 million of Open Interest in the September month futures contract, followed by Tata Steel witnessing an addition of 0.49 million of Open Interest in the September month contract; while Reliance Industries witnessed a contraction of 0.87 million of Open Interest in the September month futures contract, State Bank of India witnessed an addition 0.06 million of Open Interest in the September month contract and HDIL witnessed a contraction of 0.34 million of Open Interest in the September month's future contract