Nifty snaps two days’ losing streak; ends above 7,950 mark

After witnessing drubbing in the two previous sessions, Nifty heaved a sigh of relief, settling with good gains on account of positive global cues on speculation that the US Federal Reserve may continue with its low interest rate regime for a considerable time. The Fed meeting will end later in the day and any pledge to continue low rates could raise hopes of additional foreign flows into emerging markets such as India. Some support also came in from reports that foreign direct investment (FDI) flows into India more than doubled to $3.5 billion in July, compared to FDI worth $1.65 billion in July 2013. Furthermore, domestic as well as global sentiment also improved after China's central bank injected $81 billion into banks to stimulate the world's second-largest economy. However, gains in domestic the nifty remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 829 crore on September 16, 2014.

After gap up opening, nifty showed some strength in late morning trades, but the sentiments turned pessimistic in afternoon trades and the index drifted lower, however the market regained its momentum in the final hour of trade and finished the day gaining over half a percent on the index. Shares of IT majors have surged on hopes that Fed will stick to its pledge of keeping rates low. Besides, Metal shares have rebounded in today’s trade and gained after China's economic stimulus raised hopes of a boost in demand in the world's biggest consumer of metals.

The top gainers from the F&O segment were Hexaware, Arvind and Crompton Greaves. The top losers were IRB Infrastructure Developers, RCOM and Bata India. 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. In today's session, some traders exited from 7900, 8000 and 8100 calls on the back of profit booking.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 2.52% and reached 12.94. The 50-share CNX Nifty increased by 42.60 points or 0.54% to settle at 7,975.50. Nifty September 2014 futures closed at 7992.85 on Wednesday at a premium of 17.35 points over spot closing of 7,975.50, while Nifty October 2014 futures ended at 8037.50 at a premium of 62.00 points over spot closing. Nifty September futures saw contraction of 0.28 million (mn) units, taking the total outstanding open interest (OI) to 12.63 mn units. The near month derivatives contract will expire on September 25, 2014.

From the most active contracts, Reliance Communications September 2014 futures traded at a discount of 0.15 points at 103.15 compared with spot closing of 103.30. The number of contracts traded were 17,997.

Reliance Industries September 2014 futures traded at a premium of 1.95 points at 990.95 compared with spot closing of 989.00. The number of contracts traded were 19,670.

Tata Steel September 2014 futures traded at a premium of 2.35 points at 500.30 compared with spot closing of 497.95. The number of contracts traded were 17,820.

Apollo Tyre September 2014 futures traded at a premium of 0.20 points at 202.20 compared with spot closing of 202.00. The number of contracts traded were 12,380.

Reliance Capital September 2014 futures traded at a discount of 5.65 points at 519.80 compared with spot closing of 525.45. The number of contracts traded were 12,900.

Among Nifty calls, 8000 SP from the September month expiry was the most active call with a contraction of 0.07 million open interests. Among Nifty puts, 8,000 SP from the September month expiry was the most active put with an addition of 0.54 million open interests. The maximum OI outstanding for Calls was at 8200 SP (7.75 mn) and that for Puts was at 7,900 SP (5.93 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7998.45 --- Pivot Point 7967.70 --- Support --- 7944.75.

The Nifty Put Call Ratio (PCR) finally stood at 0.97 for September month contract. The top five scrips with highest PCR on OI were OFSS (2.79), Kotak Bank (1.18), SUN TV (1.13), Maruti Suzuki (1.05) and Cipla (1.03). 

Among most active underlying, Arvind witnessed an addition of 0.30 million of Open Interest in the September month futures contract, followed by State Bank of India witnessing a contraction of 0.10 million of Open Interest in the September month contract; while Tata Steel witnessed a contraction of 1.57 million of Open Interest in the September month futures contract, Infosys witnessed an addition 0.19 million of Open Interest in the September month contract and Yes Bank witnessed a contraction of 0.02 million of Open Interest in the September month's future contract.