Nifty ends on a positive note after previous session’s drubbing

Responding to the huge sell off the previous day, Nifty made a dramatic comeback by staging a smart recovery from the lows of the day as investors engaged themselves in bargain hunting in fundamentally strong stocks and ended higher with a 30-point gain.
 
Nifty heaved a sigh of relief garnering a good gain on Friday’s trade, as gains in financials helped offset sharp losses in IT majors. Besides, encouraging corporate earnings and exit polls showing the BJP gaining majority in Maharashtra and Haryana Assembly polls triggered fresh spell of buying by investors. Sentiment on the street improved as Reserve Bank of India (RBI) governor Raghuram Rajan has expressed hopes on the Indian growth story and has said that the country is seeing a pick-up in economic growth and more can be done to support it on a sustainable basis. Some support also came from mixed closing on other Asian markets and a rally in the European markets after positive US data. However, gains remained capped as sharp selling was witnessed in TCS and HCL Technologies after they reported lower-than-expected revenues for the September quarter. Traders were seen piling positions in Bankex, Consumer Durables and Capital Goods while selling was witnessed in IT and TECK sector stocks.

Although Nifty showed some strength in morning trades, it failed to remain afloat for long and drifted lower. The index, however recovered quickly in order to set itself for a turnaround amidst a volatile session of trade as the European markets bounced back and surged on Friday, ending their longest losing streak in 11 years on hopes that policy makers will come up with more stimulus measures. Finally, Nifty ended the session above its crucial 7,750 mark with a gain of over four tens of a percent.

Today’s rally showed that there are more stem left in market and if the Maharashtra and Haryana assembly elections results, which are due on Sunday, come according to street estimates then market may demonstrate some good trade, but any disappointment can trigger the sharp selling. The top gainers from the F&O segment were Andhra Bank, Oriental Bank of Commerce and Jain Irrigation Systems. On the other hand, the top losers were TCS, HCL Tech and CESC. In the index option segment, maximum OI continues to be seen in the 8100-8000 calls and 7800-7700 puts indicating this is the trading range expectation.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 0.20% and reached 16.40. The 50-share CNX Nifty increased by 31.50 points or 0.41% to settle at 7,779.70. Nifty October 2014 futures closed at 7817.05 on Friday at a premium of 37.35 points over spot closing of 7,779.70, while Nifty November 2014 futures ended at 7858.00 at a premium of 78.30 points over spot closing. Nifty October futures saw an addition of 1.20 million (mn) units, taking the total outstanding open interest (OI) to 15.64 mn units. The near month derivatives contract will expire on October 30, 2014.

From the most active contracts, Reliance Industries October 2014 futures traded at a premium of 5.30 points at 943.00 compared with spot closing of 937.70. The number of contracts traded were 23,141.

HDFC Bank October 2014 futures traded at a premium of 3.95 points at 891.75 compared with spot closing of 887.80. The number of contracts traded were 20,868.

DLF October 2014 futures traded at a premium of 1.35 points at 111.20 compared with spot closing of 109.85. The number of contracts traded were 22,798.

Tata Motors October 2014 futures traded at a premium of 3.10 points at 478.45 compared with spot closing of 475.35. The number of contracts traded were 17,781.

Tata Steel October 2014 futures traded at a premium of 1.80 points at 449.95 compared with spot closing of 448.15. The number of contracts traded were 15,686.

Among Nifty calls, 7900 SP from the October month expiry was the most active call with an addition of 1.06 million open interests. Among Nifty puts, 7,700 SP from the October month expiry was the most active put with an addition of 0.66 million open interests. The maximum OI outstanding for Calls was at 8000 SP (6.85 mn) and that for Puts was at 7,800 SP (6.08 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7824.65 --- Pivot Point 7774.25 --- Support --- 7729.30.

The Nifty Put Call Ratio (PCR) finally stood at 0.93 for October month contract. The top five scrips with highest PCR on OI were BHEL (1.07), SAIL (1.03), MRF (1.00), IndusInd Bank (0.92) and PNB (0.92). 

Among most active underlying, Tata Consultancy Services witnessed an addition of 0.64 million of Open Interest in the October month futures contract, followed by Tata Consultancy Services witnessing a contraction of 0.04 million of Open Interest in the October  month contract; while State Bank of India witnessed an addition of 0.06 million of Open Interest, ICICI Bank witnessed an addition of 0.06 million of Open Interest in the October month contract and Tata Motors witnessed an addition of 1.11 million of Open Interest in the October month's future contract.