Nifty gains for third consecutive session; closes above 8300 level

After trading range bound for most part of the day, sentiments turned bullish in the second half of the session as European counterparts made a good opening and positive statement from Finance Minister Arun Jaitley that investments are significantly going to move up in coming days. He also added that the Government will spend more on infrastructure, incentivise expenditure in manufacturing sector to help boost growth and create more jobs. Some support also came in from reports that the World Bank has estimated that Indian economy is likely to grow by 6.4% in 2015 and accelerate further in the next year on the back of steps being taken by the Narendra Modi-led NDA government. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 298 crore on January 09, 2015. Traders were seen piling positions in FMCG, IT and Capital Goods stocks while selling was witnessed in Metal, Oil & Gas and PSU stocks.

Earlier, the domestic market made a gap-down start as global cues remained subdued with US markets ending lower on Friday following a two-day rally as December’s jobs report gave a mixed view of the economy, with financial shares leading the way lower. Thereafter the key index oscillated in an tight range through the first half as market participants remained on the sidelines ahead of major macro data of inflation and industrial production to be announced later in the day that is likely to set the tone for the Reserve Bank of India’s (RBI’s) move on interest rates in its next policy review in February. In the second half of the session, the index slowly gathered steam and surged above the neutral line. Eventually, Nifty ended the day’s trade in the positive terrain with a gain of over half a percentage point, recapturing its crucial 8,300 mark.

The top gainers from the F&O segment were Bharat Forge, Sun TV Network and CESC. On the other hand, the top losers were Coal India, Petronet LNG and Jaiprakash Associates. 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, 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 0.97% and reached 16.11. The 50-share CNX Nifty was up by 38.50 points or 0.46% to settle at 8,323.00. Nifty January 2015 futures closed at 8360.55 on Monday at a premium of 37.55 points over spot closing of 8323.00, while Nifty February 2015 futures ended at 8409.60 at a premium of 86.60 points over spot closing. Nifty January futures saw an addition of 0.44 million (mn) units, taking the total outstanding open interest (OI) to 17.55 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 2.10 points at 309.00 compared with spot closing of 306.90. The number of contracts traded were 19,410.

ICICI Bank January 2015 futures traded at a premium of 1.25 points at 347.90 compared with spot closing of 346.65. The number of contracts traded were 16,387.

HDFC Bank January 2015 futures traded at a premium of 7.60 points at 973.80 compared with spot closing of 966.20. The number of contracts traded were 13,969.

Reliance Industries January 2015 futures traded at a premium of 2.05 points at 854.55 compared with spot closing of 852.50. The number of contracts traded were 16,290.

Axis Bank January 2015 futures traded at a premium of 2.45 points at 504.00 compared with spot closing of 501.55. The number of contracts traded were 20,473.Among Nifty calls, 8400 SP from the January month expiry was the most active call with a contraction of 0.20 million open interests. Among Nifty puts, 8,200 SP from the January month expiry was the most active put with an addition of 0.26 million open interests. The maximum OI outstanding for Calls was at 8400 SP (4.41 mn) and that for Puts was at 8,000 SP (7.25 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8355.20--- Pivot Point 8300.40--- Support --- 8268.20.

The Nifty Put Call Ratio (PCR) finally stood at 1.35 for January month contract. The top five scrips with highest PCR on OI were HUL (1.45), Grasim (1.18), BHEL (1.16), Maruti Suzuki (1.07) and Infosys (1.04). 

Among most active underlying, Infosys witnessed a contraction of 0.36 million of Open Interest in the January month futures contract, followed by Hindustan Unilever witnessing an addition of 1.19 million of Open Interest in the January month contract; State Bank of India witnessed a contraction of 0.07 million of Open Interest in the January month contract, ICICI Bank witnessed an addition of 0.15 million of Open Interest in the January month contract and Larsen & Toubro witnessed a contraction of 0.26 million of Open Interest in the January month's future contract.