Nifty signs off 2014 on optimistic note

Nifty gained 31.4 percent in 2014, posting its best gain since 2009 in a year marked by a series of record highs. Coming back to today's trading session, Nifty signed off 2014 on an optimistic note prompted by the strong global cues as well as positive industry related announcements in the domestic front. Sentiments got a boost as the government stated that it intends to develop industrial corridors and smart cities for providing infrastructure based on modern technology. Furthermore, Environment Ministry’s latest move to provide a major relaxation for faster execution of all linear projects including roads, rail and power also added to the optimistic sentiments. Foreign investors also remained buoyant about the domestic economic growth and piled up positions in domestic equities. Foreign portfolio investors (FPIs) bought shares worth a net Rs 277.92 crore in the previous session. However, some investors remained cautious as the finance ministry decided not to extend excise duty cuts on automobiles and consumer durables beyond December 31, in order to meet the Budget target of bringing fiscal deficit down to 4.1% of GDP.

After getting a cautious start, nifty showed some strength in early morning trades however, it failed to breach the narrow 48-point range for most part of the day, ending the session above its crucial 8,250 mark with gains of over four tenths of a percent. Most of the sectoral indices on NSE concluded last trading session of CY14 on an upbeat note, however stocks from Auto counter turned out to be the only exception.

The top gainers from the F&O segment were Amtek Auto, Unitech and MindTree. On the other hand, the top losers were Eicher Motors, Mahindra & Mahindra and Bosch. In the index options segment, maximum OI continues to be seen in the 8400-8600 calls and 8000-8200 puts indicating the expected trading range. 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 1.73% and reached 15.12. The 50-share CNX Nifty increased by 34.45 points or 0.42% to settle at 8,282.70. Nifty January 2015 futures closed at 8337.85 on Wednesday at a premium of 55.15 points over spot closing of 8282.70, while Nifty February 2015 futures ended at 8391.60 at a premium of 108.90 points over spot closing. Nifty January futures saw contraction of 0.15 million (mn) units, taking the total outstanding open interest (OI) to 21.17 mn units. The near month derivatives contract will expire on January 29, 2015.

From the most active contracts, Axis Bank January 2015 futures traded at a premium of 3.80 points at 506.20 compared with spot closing of 502.40. The number of contracts traded were 15,734.

State Bank of India January 2015 futures traded at a premium of 2.70 points at 314.55 compared with spot closing of 311.85. The number of contracts traded were 13,142.

Tata Steel January 2015 futures traded at a premium of 2.75 points at 402.35 compared with spot closing of 399.40. The number of contracts traded were 12,253.

HDFC Bank January 2015 futures traded at a premium of 10.50 points at 962.10 compared with spot closing of 951.60. The number of contracts traded were 11,383.

Tata Motors January 2015 futures traded at a premium of 3.90 points at 499.45 compared with spot closing of 495.55. The number of contracts traded were 11,247.

Among Nifty calls, 8400 SP from the January month expiry was the most active call with an addition of 0.03 million open interests. Among Nifty puts, 8,200 SP from the January month expiry was the most active put with an addition of 0.36 million open interests. The maximum OI outstanding for Calls was at 8600 SP (3.56 mn) and that for Puts was at 8,000 SP (5.53 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8301.22 --- Pivot Point 8272.48 --- Support --- 8253.97.

The Nifty Put Call Ratio (PCR) finally stood at 1.29 for January month contract. The top five scrips with highest PCR on OI were Bajaj-Auto (1.07), DLF (1.03), Maruti Suzuki (1.02), Century Textiles & Industries (1.02) and IndusInd Bank (0.98). 

Among most active underlying, State Bank of India witnessed a contraction of 0.03 million of Open Interest in the January month futures contract, followed by Yes Bank witnessing an addition of 0.10 million of Open Interest in the January month contract; SKS Microfinance witnessed an addition of 0.27 million of Open Interest in the January month contract, ICICI Bank witnessed an addition of 0.09 million of Open Interest in the January month contract and Axis Bank witnessed an addition of 0.41 million of Open Interest in the January month's future contract.