Nifty gains for third consecutive session; closes above 8550 level

The fifty stock index -- Nifty -- continued its northward journey for third consecutive day on Monday and finished the range bound session of trade with a gain of over four tenth of a percent. Sentiments remained bullish with expectations that the RBI’s surprise rate cut last week would revive credit growth. Besides, appreciating rupee which strengthened to almost two-month high of 61.58 (intra-day) against the dollar also aided sentiments. Some support also came on report that the Foreign Direct Investment (FDI) for April-November period of the ongoing fiscal, grew by 22% to $18.88 billion as against $15.45 billion in the same period a fiscal before. Meanwhile, foreign institutional investors were net buyers in Indian equities worth Rs 1,100 crore on January 16, 2015.

After gap up opening, nifty showed some strength in early morning trades however, it failed to breach the narrow 40-point range for most part of the day, ending the session slightly above its crucial 8,550 mark with a gain of over four tenth of a percent. Firm global cues and positive economy related reports provided support to most sectoral indices.

CNX Pharma ending with a gain of over a percent was the top gaining sector, followed by Bank Nifty up by 0.95% and CNX Auto up by 0.83%. On the other hand, CNX FMCG down 1.15%, CNX Media down 0.25% and CNX PSU Bank up by 0.16% remained the major losers on NSE sectoral space.

The top gainers from the F&O segment were The Karnataka Bank, Wipro and JSW Energy. On the other hand, the top losers were Mahindra & Mahindra Financial Services, Hindustan Unilever and TVS Motor Company. 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. 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 India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 2.17% and reached 17.65. The 50-share CNX Nifty was up by 36.90 points or 0.43% to settle at 8,550.70. Nifty January 2015 futures closed at 8574.10 on Monday at a premium of 23.40 points over spot closing of 8550.70, while Nifty February 2015 futures ended at 8622.60 at a premium of 71.90 points over spot closing. Nifty January futures saw contraction of 625 units, taking the total outstanding open interest (OI) to 20.07 million (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 1.50 points at 314.70 compared with spot closing of 313.20. The number of contracts traded were 18,418.

IDFC January 2015 futures traded at a premium of 0.85 points at 171.20 compared with spot closing of 170.35. The number of contracts traded were 14,509.

ICICI Bank January 2015 futures traded at a premium of 0.40 points at 360.45 compared with spot closing of 360.05. The number of contracts traded were 18,188.

HDFC Bank January 2015 futures traded at a premium of 4.15 points at 1009.15 compared with spot closing of 1005.00. The number of contracts traded were 18,699.

Reliance Industries January 2015 futures traded at a premium of 3.00 points at 882.75 compared with spot closing of 879.75. The number of contracts traded were 32,424.

Among Nifty calls, 8600 SP from the January month expiry was the most active call with a contraction of 0.30 million open interests. Among Nifty puts, 8,500 SP from the January month expiry was the most active put with an addition of 1.23 million open interests. The maximum OI outstanding for Calls was at 8700 SP (4.54 mn) and that for Puts was at 8,000 SP (6.49 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8570.60--- Pivot Point 8551.05--- Support --- 8531.15.

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 Ultratech Cement (1.47), Maruti Suzuki (1.39), BHEL (1.37), Century Textiles & Industries (1.24) and YES Bank (1.18). 

Among most active underlying, Hindustan Unilever witnessed an addition of 0.54 million of Open Interest in the January month futures contract, followed by Reliance Industries witnessing a contraction of 0.42 million of Open Interest in the January month contract; Axis Bank witnessed a contraction of 0.03 million of Open Interest in the January month contract, ICICI Bank witnessed a contraction of 0.46 million of Open Interest in the January month contract and Infosys witnessed a contraction of 0.08 million of Open Interest in the January month's future contract.