Final hour recovery helps Nifty reclaim 8,400 mark

Domestic index CNX Nifty witnessed a jubilant run in the last leg of trade, after languishing in the red for most of the day and snapped the day’s trade near its intraday high recapturing its crucial 8,400 mark. Sentiments took U-turn in the final hour of trade and bulls came back in action led by upmove in information technology (IT), FMCG and Banking stocks while, value buying in fundamentally strong stocks too supported the turnaround. Sentiment on the street also improved as Organization for Economic Cooperation and Development (OECD) pointed that economy is coming out of its worst slowdown in a quarter-century and implementation of new reforms held the key for putting the economy on a strong and sustainable growth path of 8%. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth Rs 71.80 crore on November 19, 2014. However, global cues remained subdued as most of the Asian equity indices shut shop in the negative terrain as market participants remained influenced by the disappointing overnight cues from US markets as Fed minutes revealed scant little insights about the US central bank’s policy plans. Moreover, European shares were trading lower after some downbeat French and Chinese economic data.

Back home, the market got off to a cautious but positive start and lost some ground in late morning trade on absence of any positive triggers and due to profit booking in frontline line blue-chip stocks. Moreover, the rupee extending its depreciating streak for sixth straight session, weakened to nine-month low level dampening the sentiments. Market, for most of the session, traded below the neutral line as Investors turned cautious ahead of the winter session of parliament, which begins next week, and RBI’s policy review schedule on December 2, 2014. However, some value buying in dying hours helped market to end the session in the green, recapturing its crucial 8,400 mark.

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 Apollo Hospitals Enterprise, Eicher Motors and MindTree. On the other hand, the top losers were Petronet LNG, Reliance Communications and Ranbaxy Laboratories. Meanwhile, India VIX - the gauge of underlying volatility in the market - has declined in today's session, which indicates that traders have slowdown buying options contracts.  

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.25% and reached 14.16. The 50-share CNX Nifty increased by 19.60 points or 0.23% to settle at 8,401.90. Nifty November 2014 futures closed at 8420.35 on Thursday at a premium of 18.45 points over spot closing of 8,401.90, while Nifty December 2014 futures ended at 8467.65 at a premium of 65.75 points over spot closing. Nifty November futures saw contraction of 0.57 million (mn) units, taking the total outstanding open interest (OI) to 21.41 mn units. The near month derivatives contract will expire on November 27, 2014.

From the most active contracts, State Bank of India November 2014 futures traded at a discount of 0.10 points at 297.00 compared with spot closing of 297.10. The number of contracts traded were 38,097.

HDFC Bank November 2014 futures traded at a premium of 1.75 points at 920.75 compared with spot closing of 919.00. The number of contracts traded were 23,597.

Reliance Industries November 2014 futures traded at a premium of 5.15 points at 984.60 compared with spot closing of 979.45. The number of contracts traded were 17,781.

Tata Steel November 2014 futures traded at a premium of 1.80 points at 468.15 compared with spot closing of 466.35. The number of contracts traded were 20,896.

Reliance Capital November 2014 futures traded at a premium of 4.15 points at 503.65 compared with spot closing of 499.50. The number of contracts traded were 18,895.Among Nifty calls, 8400 SP from the October month expiry was the most active call with an addition of 0.02 million open interests. Among Nifty puts, 8,400 SP from the November month expiry was the most active put with an addition of 0.55 million open interests. The maximum OI outstanding for Calls was at 8500 SP (6.00 mn) and that for Puts was at 8,300 SP (6.94 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8424.12--- Pivot Point 8388.63 --- Support --- 8366.42.

The Nifty Put Call Ratio (PCR) finally stood at 1.39 for November month contract. The top five scrips with highest PCR on OI were Dr. Reddy's Laboratories (1.54), DLF (1.47), Eicher Motors (1.32), Dabur (1.32) and Auro Pharma (1.10). 

Among most active underlying, State Bank of India witnessed a contraction of 3.36 million of Open Interest in the November month futures contract, followed by Infosys witnessing a contraction of 0.01 million of Open Interest in the November  month contract; while Ranbaxy Laboratories witnessed a contraction of 0.04 million of Open Interest, Reliance Industries witnessed a contraction of 0.48 million of Open Interest in the November month contract and Kotak Mahindra Bank witnessed a contraction of 0.13 million of Open Interest in the November month's future contract.