Nifty extends gain for second consecutive session; closes above 8500 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 19 points or 0.23%, on continued buying activities by both funds and retail investors. Earlier, the benchmark got off to a pessimistic start following the Asian peers as sentiments got pressured by Switzerland’s unexpected move to abandon its currency cap jolted markets already roiled by plunging commodities prices. Thereafter started the road to recovery for the bourses which kept slowly but steadily moving towards the neutral line. Sentiments got a boost after the trade deficit for the month of December decreased by 44% at $9.43 billion hitting a ten month low mainly on account of falling imports due to slump in crude prices. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 1,738.24 crore on January 15, 2015. Market, for most of the session, see-saw around the neutral line as investors remained sideways in the absence of any significant trigger at domestic front. Sectors wise, shares of housing finance companies were trading higher with most the stocks from the sector trading at their respective lifetime highs on expectations that lower interest rates would help revive demand for home loans, while traders were booking profit in cement stocks after the recent gains. However, some value buying in second half of trade helped market to end the session in the green, recapturing its crucial 8,500 mark. 

Most of the sectoral indices on the NSE settled in the positive territory with CNX Media gaining the most, ending with a gain of over four percent followed by CNX Pharma up by 1.51% and CNX FMCG up by 0.96% while, CNX PSU Bank down 1.53%, CNX IT down 0.09% and Bank Nifty up by 0.06% remained the major losers on NSE sectoral space. Meanwhile, India VIX - the gauge of underlying volatility in the market - - has risen in today's session, which indicates that market participants expect uncertainty going ahead.

The top gainers from the F&O segment were Sun TV Network, Indiabulls Housing Finance and Shriram Transport Finance Company. On the other hand, the top losers were Punjab National Bank, Syndicate Bank and Hindalco Industries. In the index options segment, maximum OI continues to be seen in the 8600-8700 calls and 8100-8200 puts indicating the expected trading range.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 6.90% and reached 17.27. The 50-share CNX Nifty was up by 19.65 points or 0.23% to settle at 8,513.80. Nifty January 2015 futures closed at 8535.05 on Friday at a premium of 21.25 points over spot closing of 8513.80, while Nifty February 2015 futures ended at 8583.60 at a premium of 69.80 points over spot closing. Nifty January futures saw contraction of 0.57 million (mn) units, taking the total outstanding open interest (OI) to 20.07 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 1.65 points at 316.90 compared with spot closing of 315.25. The number of contracts traded were 24,432.

ICICI Bank January 2015 futures traded at a premium of 0.05 points at 353.70 compared with spot closing of 353.65. The number of contracts traded were 17,770.

HDFC Bank January 2015 futures traded at a premium of 7.20 points at 1007.70 compared with spot closing of 1000.50. The number of contracts traded were 25,549.

Reliance Industries January 2015 futures traded at a premium of 2.60 points at 870.10 compared with spot closing of 867.50. The number of contracts traded were 30,267.

Axis Bank January 2015 futures traded at a premium of 1.90 points at 516.20 compared with spot closing of 514.30. The number of contracts traded were 39,217.

Among Nifty calls, 8600 SP from the January month expiry was the most active call with a contraction of 0.16 million open interests. Among Nifty puts, 8,400 SP from the January month expiry was the most active put with an addition of 0.39 million open interests. The maximum OI outstanding for Calls was at 8600 SP (4.64 mn) and that for Puts was at 8,000 SP (6.83 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8545.62--- Pivot Point 8498.93--- Support --- 8467.12.

The Nifty Put Call Ratio (PCR) finally stood at 1.55 for January month contract. The top five scrips with highest PCR on OI were HUL (1.52), BHEL (1.49), Ultratech Cement (1.48), Century Textiles & Industries (1.27) and Maruti Suzuki (1.24). 

Among most active underlying, Tata Consultancy Services witnessed a contraction of 0.19 million of Open Interest in the January month futures contract, followed by Axis Bank witnessing a contraction of 0.89 million of Open Interest in the January month contract; LIC Housing Finance witnessed an addition of 1.27 million of Open Interest in the January month contract, Larsen & Toubro witnessed a contraction of 0.63 million of Open Interest in the January month contract and Reliance Industries witnessed a contraction of 1.01 million of Open Interest in the January month's future contract.