Nifty snaps three days losing streak; ends above 8,100 mark

After witnessing some consolidation in the previous three sessions, the domestic 50-share index, Nifty, heaved a sigh of relief garnering marginal gains in Friday’s trade as investors adopted a wait-and-watch stance ahead of macro economic data due for release later today. Sentiment on the street improved after Manila based funding agency Asian Development Bank (ADB) said in a report that India has the potential to become a leading knowledge based economy with its youth population and growing information technology though it should overcome some barriers in this regard. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 433.55 crore on September 11, 2014. However, gains remained capped as some cautiousness crept in with RBI Governor Raghuram Rajan’s statement that abrupt reversal of low interest rates globally could create substantial amounts of damage and that it should be done in predictable and careful way. Traders were seen piling up positions in Healthcare, Consumer Durables and Auto while selling was witnessed in Power, Capital Goods and Realty counters.

After getting a cautious but positive start, nifty was trading near the neutral line for most part of the day’s trade, lacking any significant upside triggers as investors keenly eyed the August CPI and July industrial production data to be released later today. However, some low level buying in the final hour of trade help nifty to conclude the trade above its crucial 8,100 mark.

The top gainers from the F&O segment were Oracle Financial Services Software, Exide Industries and Cipla. The top losers were Bharat Forge, Jaiprakash Associates and Hindalco Industries. In the index options segment, maximum OI continues to be seen in the 8300-8200 calls and 8000-7900 puts indicating the expected trading range. The market is likely to correct in near term as Indian economy is showing signs of sluggishness, growth rate of industrial production slowed to 0.5% versus 3.4% in the month of June. Besides, Retail inflation as measured by consumer price index for August slipped marginally to 7.8% as against 7.96 % in previous month.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.12% and reached 12.36. The 50-share CNX Nifty increased by 19.80 points or 0.24% to settle at 8,105.50. Nifty September 2014 futures closed at 8137.85 on Friday at a premium of 32.35 points over spot closing of 8,105.50, while Nifty October 2014 futures ended at 8180.40 at a premium of 74.90 points over spot closing. Nifty September futures saw contraction of 0.23 million (mn) units, taking the total outstanding open interest (OI) to 13.69 mn units. The near month derivatives contract will expire on September 25, 2014.

From the most active contracts, IDFC September 2014 futures traded at a premium of 0.80 points at 149.75 compared with spot closing of 148.95. The number of contracts traded were 12,297.

Reliance Industries September 2014 futures traded at a premium of 3.60 points at 1019.35 compared with spot closing of 1,015.75. The number of contracts traded were 15,954.

Tata Steel September 2014 futures traded at a premium of 1.60 points at 518.60 compared with spot closing of 517.00. The number of contracts traded were 11,882.

Exide Industries September 2014 futures traded at a premium of 0.30 points at 175.70 compared with spot closing of 175.40. The number of contracts traded were 12,491.

Arvind September 2014 futures traded at a premium of 1.25 points at 337.55 compared with spot closing of 336.30. The number of contracts traded were 13,692.

Among Nifty calls, 8200 SP from the September month expiry was the most active call with an addition of 0.56 million open interests. Among Nifty puts, 8,100 SP from the September month expiry was the most active put with an addition of 0.12 million open interests. The maximum OI outstanding for Calls was at 8200 SP (6.33 mn) and that for Puts was at 8,000 SP (8.28 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8123.33 --- Pivot Point 8090.32 --- Support --- 8052.68.

The Nifty Put Call Ratio (PCR) finally stood at 1.15 for September month contract. The top five scrips with highest PCR on OI were OFSS (1.70), CIPLA (1.24), Kotak Bank (1.18), Auro Pharma (1.14) and YES Bank (1.13). 

Among most active underlying, State Bank of India witnessed an addition of 0.03 million of Open Interest in the September month futures contract, followed by Cipla witnessing an addition of 0.49 million of Open Interest in the September month contract; while Arvind witnessed an addition of 0.19 million of Open Interest in the September month futures contract, Sun Pharmaceuticals witnessed an addition 0.45 million of Open Interest in the September month contract and Tata Steel witnessed a contraction of 0.49 million of Open Interest in the September month's future contract.