Nifty extends gains for second consecutive session; closes above 8250 level

The fifty stock index -- Nifty -- continued its northward journey for second consecutive day on Friday and finished the volatile day of trade with a gain of 49.90 points or 0.61%, driven by a sharp 5% rally in Infosys shares after the company's December quarter earnings beat market expectations. The company has reported a net profit of Rs 3,250 crore for the third quarter ended December 31, 2014, up 4.9% from Rs 3,096 crore in quarter ended September 30, 2014. Earlier the sentiments were boosted by positive US jobs data, expectations of aggressive action from European Central Bank and rebound in crude oil prices. Some support also came in from Finance Minister Arun Jaitley’s statement that significant downward trend in inflation has been recorded in the second and third quarter of 2014-15. However, investors turned cautious after a poll report showed that food prices probably fueled a sharp rise in India’s retail inflation in December after the record low struck the previous month, weighing against chances of an early interest rate cut by the Reserve Bank of India. Sentiments were also undermined on report that selling by foreign institutional investors continued and they were net sellers in Indian equities worth Rs 477 crore on January 8, 2014. Nevertheless, late short covering in blue-chip stocks and better than expected results of IT major, Infosys helped the index to settle in green.

Nifty witnessed a roller-coaster ride, on the back of buying and selling in key index heavyweights. After gap up opening, nifty showed some strength in morning trades, but the sentiments turned pessimistic in afternoon trades and index drifted lower, however the market regained its momentum in the final hour of trade and finished the day higher, gaining over half a percent. Traders were seen piling positions in IT, Consumer Durables and Oil & Gas stocks while selling was witnessed in Realty, Infrastructure and Power sector stocks.

The top gainers from the F&O segment were Hindustan Unilever, Infosys and Wockhardt. On the other hand, the top losers were Ashok Leyland, DLF and Idea Cellular. In the index options segment, maximum OI continues to be seen in the 8400-8500 calls and 8000-8100 puts indicating the expected trading range. Meanwhile, some profit booking was seen in 8200, 8300 and 8400 Puts, which contracted by 2.83, 3.28 and 7.75 lakh shares, respectively.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 3.14% and reached 15.95. The 50-share CNX Nifty was up by 49.90 points or 0.61% to settle at 8,284.50.

Nifty January 2015 futures closed at 8315.50 on Friday at a premium of 31.00 points over spot closing of 8284.50, while Nifty February 2015 futures ended at 8366.45 at a premium of 81.95 points over spot closing. Nifty January futures saw contraction of 0.68 million (mn) units, taking the total outstanding open interest (OI) to 17.11 mn units. The near month derivatives contract will expire on January 29, 2015.

From the most active contracts, State Bank of India January 2015 futures traded at a premium of 1.75 points at 304.75 compared with spot closing of 303.00. The number of contracts traded were 18,961.

ICICI Bank January 2015 futures traded at a premium of 1.35 points at 343.85 compared with spot closing of 342.50. The number of contracts traded were 22,401.

HDFC Bank January 2015 futures traded at a premium of 8.85 points at 978.85 compared with spot closing of 970.00. The number of contracts traded were 28,904.

Reliance Industries January 2015 futures traded at a premium of 1.70 points at 863.20 compared with spot closing of 861.50. The number of contracts traded were 25,503.

ONGC January 2015 futures traded at a premium of 1.75 points at 352.35 compared with spot closing of 350.60. The number of contracts traded were 35,546.Among Nifty calls, 8400 SP from the January month expiry was the most active call with a contraction of 0.77 million open interests. Among Nifty puts, 8,200 SP from the January month expiry was the most active put with an addition of 0.09 million open interests. The maximum OI outstanding for Calls was at 8400 SP (4.61 mn) and that for Puts was at 8,000 SP (6.68 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8328.27--- Pivot Point 8259.53--- Support --- 8215.77.

The Nifty Put Call Ratio (PCR) finally stood at 1.25 for January month contract. The top five scrips with highest PCR on OI were HUL (1.35), Grasim (1.19), UltraTech Cement (1.13), Maruti Suzuki (1.13) and BHEL (1.12). 

Among most active underlying, Infosys witnessed an addition of 0.74 million of Open Interest in the January month futures contract, followed by ICICI Bank witnessing an addition of 1.22 million of Open Interest in the January month contract; Ashok Leyland witnessed an addition of 9.87 million of Open Interest in the January month contract, Reliance Industries witnessed a contraction of 0.83 million of Open Interest in the January month contract and Tata Motors witnessed a contraction of 0.51 million of Open Interest in the January month's future contract.