Nifty gains after previous session’s drubbing; ends above 8,350 mark

The fifty stock index -- Nifty -- after snapping the previous session, ended the last trading day of the week on a positive note with a gain of about four tens of a percent. After getting a cautious but positive start, nifty showed some strength in morning trades however, it failed to breach the 54-point range for most part of the day, ending the session above its crucial 8,350 mark. The sentiment were on optimistic note after India’s main inflation gauge, based on monthly WPI, stood at 1.77% for the month of October as compared to 2.38% in the previous month and 7.24% during the corresponding month of the previous year. Domestic sentiment has got further support from report that India would have the fastest economic expansion among Asian countries and its gross domestic product is expected to grow by 6.3% in 2015. Besides, falling global crude oil prices also influenced trading sentiments. The slump in crude prices will lead to a substantial decline in India's import bill. This means lower fiscal deficit and further easing in inflation. However, gains remained capped on report that India’s gold import bill, one of the biggest contributors to the country's trade deficit, for the month of October is expected to continue the surge of the past two months. In September India imported gold valued at $3.75 billion while the October bill is expected to come in at about $4 billion for almost 120 tonnes of the yellow metal.

After showing wonderful economic data, Indian market may show some record braking session in coming week, but any disappointment from global market will adversely impact domestic market.

Coming to F&O market internals, in the index options segment, maximum OI continues to be seen in the 8400-8500 calls and 8300-8200 puts indicating the expected trading range.  The top gainers from the F&O segment were JP Associate, JP Power and SAIL. On the other hand, the top losers were TVS Motor, Ranbaxy and SUN TV. Meanwhile, India VIX - the gauge of underlying volatility in the market - has risen in today's session, which shows that traders are buying more options contracts as insurance against declines in the market.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 0.17% and reached 13.97. The 50-share CNX Nifty increased by 32.05 points or 0.38% to settle at 8,389.90. Nifty November 2014 futures closed at 8416.65 on Friday at a premium of 26.75 points over spot closing of 8,389.90, while Nifty December 2014 futures ended at 8464.20 at a premium of 74.30 points over spot closing. Nifty November futures saw contraction of 0.25 million (mn) units, taking the total outstanding open interest (OI) to 22.84 mn units. The near month derivatives contract will expire on November 27, 2014.

From the most active contracts, HDFC Bank November 2014 futures traded at a premium of 4.80 points at 936.80 compared with spot closing of 932.00. The number of contracts traded were 27,517.

BHEL November 2014 futures traded at a discount of 4.25 points at 242.20 compared with spot closing of 246.45. The number of contracts traded were 22,342.

Reliance Industries November 2014 futures traded at a premium of 6.95 points at 975.95 compared with spot closing of 969.00. The number of contracts traded were 15,969.

Tata Steel November 2014 futures traded at a premium of 0.15 points at 480.65 compared with spot closing of 480.50. The number of contracts traded were 35,009.

Tata Motors November 2014 futures traded at a premium of 2.90 points at 525.40 compared with spot closing of 522.50. The number of contracts traded were 16,162.

Among Nifty calls, 8400 SP from the October month expiry was the most active call with a contraction of 0.26 million open interests. Among Nifty puts, 8,400 SP from the November month expiry was the most active put with an addition of 0.31 million open interests. The maximum OI outstanding for Calls was at 8500 SP (5.76 mn) and that for Puts was at 8,300 SP (5.98 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8411.43 --- Pivot Point 8379.12 --- Support --- 8357.58.

The Nifty Put Call Ratio (PCR) finally stood at 1.34 for November month contract. The top five scrips with highest PCR on OI were DLF (1.57), Eicher Motors (1.56), Dr. Reddy's Laboratories (1.49), Axis Bank (1.35) and Ranbaxy (1.21). 

Among most active underlying, State Bank of India witnessed an addition of 0.23 million of Open Interest in the November month futures contract, followed by Tata Steel witnessing an addition of 0.31 million of Open Interest in the November  month contract; while Infosys witnessed a contraction of 0.12 million of Open Interest, HDFC Bank witnessed an addition of 0.20 million of Open Interest in the November month contract and BHEL witnessed an addition of 0.89 million of Open Interest in the November month's future contract.