Rejuvenated Nifty closes above 8100 level with ease

Nifty continued its northward journey for second consecutive day on Thursday and finished the excellent day of trade with outstanding gains of 139 points or 1.75%, on sustained buying by funds and retail investors as the US Federal Reserve renewed its pledge to keep interest rates near zero for ‘a considerable time’. The domestic sentiment was also bolstered on optimism that the trade ties with China would attract foreign inflows and revive the country’s economic growth. During the meeting held today between Prime Minister Narendra Modi and Chinese President Xi Jinping, China has committed to invest $20 billion in five years. Besides, some support came after the Reserve Bank of India eased foreign direct investment (FDI) norms allowing companies to issue equity shares to a resident outside India against any type of fund subject to certain conditions. All the sectoral indices on the NSE were higher today with strong buying seen particularly in realty, Media and Auto stocks.

After a negative opening, nifty recouped its losses and quickly entered into positive terrain in early morning trades. Thereafter, nifty started its uphill journey in which it crossed many important hurdles like 8000 and 8050. There was not a single instance of profit booking on the index as it investors bought stocks across the board. Finally, nifty concluded above 8100 mark with a gain of over one and half a percentage point.

After today’s amazing run-up, the market is likely to pick-up in near term as participants will utilized all major dips as an opportunity to buy & accumulate good quality stocks. Some participants also believe the structural bull-run in the Indian equities resumed once again after a brief round of consolidation & correction. 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 8000, 8100 and 8200 calls on the back of profit booking. The top gainers from the F&O segment were Unitech, Hexaware and HDIL. The top losers were Infosys, Just Dial and HUL.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 4.81% and reached 12.32. The 50-share CNX Nifty increased by 139.25 points or 1.75% to settle at 8,114.75. Nifty September 2014 futures closed at 8136.70 on Thursday at a premium of 21.95 points over spot closing of 8,114.75, while Nifty October 2014 futures ended at 8182.85 at a premium of 68.10 points over spot closing. Nifty September futures saw an addition of 0.95 million (mn) units, taking the total outstanding open interest (OI) to 13.58 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 6.40 points at 862.40 compared with spot closing of 856.00. The number of contracts traded were 14,106.

Reliance Industries September 2014 futures traded at a premium of 4.75 points at 1008.75 compared with spot closing of 1004.00. The number of contracts traded were 28,391.

Tata Motors September 2014 futures traded at a premium of 1.25 points at 525.60 compared with spot closing of 524.35. The number of contracts traded were 14,619.

Tata Steel September 2014 futures traded at a premium of 2.15 points at 507.40 compared with spot closing of 505.25. The number of contracts traded were 14,465.

Arvind September 2014 futures traded at a premium of 1.50 points at 327.75 compared with spot closing of 326.25. The number of contracts traded were 13,741.

Among Nifty calls, 8100 SP from the September month expiry was the most active call with a contraction of 0.93 million open interests. Among Nifty puts, 8,000 SP from the September month expiry was the most active put with an addition of 1.37 million open interests. The maximum OI outstanding for Calls was at 8200 SP (7.22 mn) and that for Puts was at 8,000 SP (8.42 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8177.17 --- Pivot Point 8058.43 --- Support --- 7996.02.

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 OFSS (2.47), Dr. Reddy's Laboratories (1.75), Hero MotoCorp (1.52), Maruti Suzuki (1.33) and Kotak Bank (1.15). 

Among most active underlying, State Bank of India witnessed an addition of 0.28 million of Open Interest in the September month futures contract, followed by Infosys witnessing an addition of 0.59 million of Open Interest in the September month contract; while United Spirits witnessed an addition of 0.52 million of Open Interest in the September month futures contract, Reliance Industries witnessed a contraction 1.14 million of Open Interest in the September month contract and Arvind witnessed a contraction of 0.84 million of Open Interest in the September month's future contract.