Bulls roar at the beginning of the christmas week; Nifty rallies over 90 points

Barometer 50 share index- CNX Nifty witnessed stupendous gains on Monday as bulls roared, tracking strong global cues and hopes of acceleration in economic reforms as the much-awaited GST Bill was introduced in the Lok Sabha on Friday. The sentiments were on optimistic note after Union Finance Minister, Arun Jaitley underscored that India could well achieve 6% growth next fiscal and required shared vision to achieve 9-10% economic growth. Some support also came in from a private survey which stated that India remains one of the most preferred investment destinations for global investors while domestic companies expect stable economic conditions in the near term. However, some traders remained reluctant to add positions in a reflection of concern in markets about volatility until the end of the year, with foreign investors selling nearly $1 billion in stocks over nine consecutive sessions.

There were concerns from a report that Foreign Direct Investment (FDI) in the country’s services sector, which contributes about 60 per cent to India’s GDP, fell 7.5 per cent to $1.22 billion during the first half of the current fiscal. Meanwhile, most of World’s share markets extended their rally into the fourth day on Monday, as a recovery in beaten-down oil prices and the rouble and more calls for quantitative easing from the ECB helped lift sentiment.

After opening gap up, nifty trimmed gains and traded in a small range for most part of the day, but it was in the last hour of trade when the index showed aggression and surpassed 8300 mark.

The market is likely to remain volatile this week as traders roll over positions in the futures & options (F&O) segment from December 2014 series to January 2015 series on Wednesday. The bourses will remain closed on Thursday on account of Christmas. In the index options segment, maximum OI continues to be seen in the 8400-8500 calls and 8200-8300 puts indicating the expected trading range.

The top gainers from the F&O segment were The India Cements, Jindal Steel & Power and Mahindra & Mahindra. On the other hand, the top losers were TVS Motor Company, Hindalco Industries and MRF. 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 2.07% and reached 14.21. The 50-share CNX Nifty increased by 98.80 points or 1.20% to settle at 8,324.00. Nifty December 2014 futures closed at 8334.20 on Monday at a premium of 10.20 points over spot closing of 8,324.00, while Nifty January 2014 futures ended at 8402.55 at a premium of 78.55 points over spot closing. Nifty December futures saw contraction of 1.84 million (mn) units, taking the total outstanding open interest (OI) to 17.95 mn units. The near month derivatives contract will expire on December 24, 2014.

From the most active contracts, State Bank of India December 2014 futures traded at a premium of 0.25 points at 308.65 compared with spot closing of 308.40. The number of contracts traded were 28,528.

ICICI Bank December 2014 futures traded at a discount of 0.90 points at 358.90 compared with spot closing of 359.80. The number of contracts traded were 25,142.

Reliance Industries December 2014 futures traded at a premium of 1.45 points at 906.20 compared with spot closing of 904.75. The number of contracts traded were 50,412.

HDFC Bank December 2014 futures traded at a discount of 0.70 points at 964.65 compared with spot closing of 965.35. The number of contracts traded were 59,703.

Tata Motors December 2014 futures traded at a discount of 0.75 points at 495.25 compared with spot closing of 496.00. The number of contracts traded were 20,186.Among Nifty calls, 8300 SP from the December month expiry was the most active call with a contraction of 1.17 million open interests. Among Nifty puts, 8,200 SP from the December month expiry was the most active put with an addition of 1.07 million open interests. The maximum OI outstanding for Calls was at 8400 SP (5.27 mn) and that for Puts was at 8,000 SP (4.62 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8360.57--- Pivot Point 8294.38 --- Support --- 8257.82.

The Nifty Put Call Ratio (PCR) finally stood at 0.98 for December month contract. The top five scrips with highest PCR on OI were SUN TV (1.05), Eicher Motors (1.05), PNB (0.97), kotak Bank (0.96) and ZEEL (0.92). 

Among most active underlying, HDFC Bank witnessed a contraction of 1.07 million of Open Interest in the December month futures contract, followed by Reliance Industries witnessing a contraction of 8.61 million of Open Interest in the December month contract; while State Bank of India witnessed  a contraction of 14.16 million of Open Interest, ICICI Bank witnessed a contraction of 9.34 million of Open Interest in the December month contract and Infosys witnessed a contraction of 1.51 million of Open Interest in the December month's future contract.