Market manages a positive close despite whole round of volatility

Volatility persisted even after the series expiry and Nifty showed great amount of choppiness on Friday. After making a flat opening and turning into green in the very first hour of trade after the big carnage, the index slipped into red, only to recover again in the final hours. Though, traders continued booking profit amid sluggish global cues but a major boost came in final hours, when global credit rating agency S&P upgraded India's credit outlook up to 'stable' from 'negative', saying that ratings on India reflects its democratic position and reflects its strong external profile. However the agency said that India’s CAD will widen from the current low of 1.8% of GDP. S&P’s current rating remains stable for India at BBB-, PM Narendra Modi’s government had pitched for a credit ratings upgrade.

The start of the October series finally turned out to be a jubilant one, Nifty not only managed to reclaim its crucial psychological level of 7900, supported by gains in banks, capital goods, pharma and metal stocks, but came very close to reclaiming the 8000 mark. Among the most active F&O Securities, JP Associates gained 5.43%, Sun Pharma gained 4.44%, SBI gained 3.35%, L&T gained 2.15%. On the other hand HDFC was down by 1.68%, ITC was down by 1.65% and Infy was down by 0.22%.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility declined by 2.78% and reached 12.9275. The 50-share CNX Nifty gained 57.00 points or 0.72% to settle at 7,968.85. Nifty October 2014 futures closed at 8031.90 on Friday at a premium of 63.05 points over spot closing of 7,968.85, while Nifty November 2014 futures ended at 8080.65 at a premium of 111.80 points over spot closing. Nifty October futures saw an addition of 0.63 million (mn) units, taking the total outstanding open interest (OI) to 16.40 mn units. The near month derivatives contract will expire on October 30, 2014.

From the most active contracts, HDFC Bank October 2014 futures traded at a premium of 10.45 points at 881.40 compared with spot closing of 870.95. The number of contracts traded were 19,665.

Reliance Industries October 2014 futures traded at a premium of 10.60 points at 943.65 compared with spot closing of 933.05. The number of contracts traded were 30,945.

Axis Bank October 2014 futures traded at a discount of 1.15 points at 389.75 compared with spot closing of 390.90. The number of contracts traded were 17,171.

Tata Motors October 2014 futures traded at a premium of 5.90 points at 516.05 compared with spot closing of 510.15. The number of contracts traded were 15,761.

Jindal Steel & Power October 2014 futures traded at a premium of 1.75 points at 185.80 compared with spot closing of 184.05. The number of contracts traded were 19,007.Among Nifty calls, 8000 SP from the October month expiry was the most active call with an addition of 0.77 million open interests. Among Nifty puts, 7,800 SP from the October month expiry was the most active put with an addition of 0.73 million open interests. The maximum OI outstanding for Calls was at 8200 SP (4.61 mn) and that for Puts was at 7,800 SP (4.60 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8027.50 --- Pivot Point 7934.65 --- Support --- 7876.00.

The Nifty Put Call Ratio (PCR) finally stood at 1.03 for October month contract. The top five scrips with highest PCR on OI were CAIRN (1.17), SRTRANSFIN (1.17), BAJAJ-AUTO (1.13), M&MFIN (1.00) and ACC (1.00). 

Among most active underlying, State Bank of India witnessed an addition of 0.26 million of Open Interest in the October month futures contract, followed by ICICI Bank witnessing an addition of 0.59 million of Open Interest in the October  month contract; while Sun Pharma witnessed a contraction of 0.06 million of Open Interest, Reliance Industries witnessed an addition of 0.80 million of Open Interest in the October month contract and Tata Motors witnessed an addition of 0.37 million of Open Interest in the October month's future contract.