Nifty gains after previous session’s consolidation; ends above 8,000 mark

Erasing previous session’s losses, CNX Nifty ended the session above its crucial 8,000 level with a gain of about half a percent on selective buying by foreign funds and investors amid mixed global cues. The sentiments were optimistic from early trades after World Bank stated that India’s GDP is likely to expand by 5.6 per cent this fiscal as reforms gain momentum and the growth is expected to accelerate as proposed measures such as GST will give a boost to manufacturing sector. Some support also came in from report that foreign institutional investors (FIIs) were net buyers to the tune of around Rs 49.14 crore on October 27, 2014. However, gains remained capped as some traders remained on the sidelines and refrained from any buying activity ahead of the two-day FOMC meet which begins today. Traders were seen piling positions in Power, Consumer Durables and PSU while selling was witnessed in Oil & Gas, FMCG and Metal sector stocks.

After gap up opening, nifty showed some strength in morning trades, but the sentiments turned pessimistic in afternoon and the index drifted lower, however the market regained its momentum in the second half of trade and finished the day gaining around half a percent on the index.

The top gainers from the F&O segment were Ranbaxy Laboratories, Oriental Bank of Commerce and JSW Energy. On the other hand, the top losers were Just Dial and Biocon. In the index option segment, maximum OI continues to be seen in the 8100-8200 calls and 8000-7900 puts indicating this is the trading range expectation.

As the expiry of near month derivatives comes closer, traders are rolling over positions in the futures & options (F&O) segment from the near month October 2014 series to November 2014 series. As per the recent data available, the rollovers to the October F&O series so far seems to be lower than average rollovers for the past few months. Sectorally, cement, capital goods and pharma stocks are witnessing high rollovers while stocks from the automobile, FMCG and power space are witnessing relatively low rollovers into the November series.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.42% and reached 13.32. The 50-share CNX Nifty increased by 35.90 points or 0.45% to settle at 8,027.60. Nifty October 2014 futures closed at 8040.35 on Tuesday at a premium of 12.75 points over spot closing of 8027.60, while Nifty November 2014 futures ended at 8083.80 at a premium of 56.20 points over spot closing. Nifty October futures saw contraction of 2.31 million (mn) units, taking the total outstanding open interest (OI) to 13.64 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 3.30 points at 937.00 compared with spot closing of 933.70. The number of contracts traded were 48,240.

HDFC Bank October 2014 futures traded at a premium of 2.80 points at 897.80 compared with spot closing of 895.00. The number of contracts traded were 22,202.

Jindal Steel and Power October 2014 futures traded at a premium of 0.15 points at 150.90 compared with spot closing of 150.75. The number of contracts traded were 17,708.

ICICI Bank October 2014 futures traded at a premium of 1.00 points at 1602.90 compared with spot closing of 1601.90. The number of contracts traded were 24,982.

Ranbaxy Laboratories October 2014 futures traded at a premium of 1.15 points at 634.65 compared with spot closing of 633.50. The number of contracts traded were 20,169.

Among Nifty calls, 8000 SP from the October month expiry was the most active call with a contraction of 0.61 million open interests. Among Nifty puts, 8,000 SP from the October month expiry was the most active put with an addition of 0.78 million open interests. The maximum OI outstanding for Calls was at 8100 SP (6.66 mn) and that for Puts was at 7,900 SP (5.43 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8045.25 --- Pivot Point 8020.15 --- Support --- 8002.50.

The Nifty Put Call Ratio (PCR) finally stood at 1.13 for October month contract. The top five scrips with highest PCR on OI were Kotak Bank (1.78), BHEL (1.57), Bajaj-Auto (1.55), Dabur (1.48) and Axis Bank (1.45). 

Among most active underlying, State Bank of India witnessed an addition of 0.13 million of Open Interest in the October month futures contract, followed by Reliance Industries witnessing a contraction of 3.76 million of Open Interest in the October  month contract; while Ranbaxy Laboratories witnessed a contraction of 0.18 million of Open Interest, ICICI Bank witnessed a contraction of 0.07 million of Open Interest in the October month contract and Lupin witnessed a contraction of 0.40 million of Open Interest in the October month's future contract.