Nifty ends at record high; surpasses 8700

Nifty ended in green for third straight session on sustained buying activities by funds and retail investors amidst positive global set-up, mainly on the back of overall macro outlook and optimism over the forthcoming budget. Sentiments got a boost as Commerce and Industry Minister Nirmala Sitharaman asserted that India will continue to introduce reforms including through the use of ordinances to make it easier for companies to do business in India. The sentiments were also on optimistic note as International Monetary Fund in the World Economic Outlook projected that India is set to become the world’s fastest-growing major economy in about two years from now. Besides, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 1,276 crore on January 20, 2015. However, gains remained capped as minor profit booking came in some companies whose share prices have appreciated sharply.

After a gap up opening, nifty showed some strength in early morning trades however, it failed to breach the 52-point range for most part of the day, ending the session above its crucial 8,700 mark, first time in a history of NSE, with a gain of over three tenth of a percent. Most of the sectoral indices on the NSE settled in the positive territory with CNX PSU Bank gaining the most, ending with a gain of over two percent followed by CNX IT up by 1.01% and CNX Finance up by 0.69% while, CNX FMCG down 1.98%, CNX Media down 1.29% and CNX Metal up by 0.66% remained the major losers on NSE sectoral space.

The top gainers from the F&O segment were Hindustan Unilever, Hexaware Technologies and Ashok Leyland. On the other hand, the top losers were ITC, JP Associate and Mcleod Russel India. 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. Some profit booking was seen in 8400, 8500 and 8600 calls, which contracted by 3.75, 9.12 and 4.36 lakh shares, respectively. On the other hand, 8800, 8700 and 8600 Put strikes saw addition of 3.75, 8.72 and 10.97 lakh shares, respectively.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 0.44 or 2.55% and reached 17.71. The 50-share CNX Nifty was up by 33.90 points or 0.39% to settle at 8,729.50.

Nifty January 2015 futures closed at 8738.50 on Wednesday at a premium of 9.00 points over spot closing of 8729.50, while Nifty February 2015 futures ended at 8791.55 at a premium of 62.05 points over spot closing. Nifty January futures saw an addition of 0.46 million (mn) units, taking the total outstanding open interest (OI) to 22.19 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 1.05 points at 327.25 compared with spot closing of 326.20. The number of contracts traded were 41,095.

HDFC Bank January 2015 futures traded at a premium of 5.70 points at 1025.65 compared with spot closing of 1019.95. The number of contracts traded were 22,373.

ITC January 2015 futures traded at a premium of 2.20 points at 353.95 compared with spot closing of 351.75. The number of contracts traded were 35,791.

Reliance Industries January 2015 futures traded at a discount of 0.55 points at 906.80 compared with spot closing of 907.35. The number of contracts traded were 35,045.

Axis Bank January 2015 futures traded at a premium of 2.95 points at 549.30 compared with spot closing of 546.35. The number of contracts traded were 27,654.

Among Nifty calls, 8700 SP from the January month expiry was the most active call with contraction of 0.44 million open interests. Among Nifty puts, 8,600 SP from the January month expiry was the most active put with an addition of 0.98 million open interests. The maximum OI outstanding for Calls was at 8700 SP (4.36 mn) and that for Puts was at 8,600 SP (5.19 mn).

The respective Support and Resistance levels of Nifty are: Resistance 8751.03--- Pivot Point 8720.32--- Support --- 8698.78.

The Nifty Put Call Ratio (PCR) finally stood at 1.77 for January month contract.

The top five scrips with highest PCR on OI were Maruti Suzuki (1.41), YES Bank (1.37), Ultratech Cement (1.28), BHEL (1.25) and HDFC (1.24).

Among most active underlying, HDFC Bank witnessed contraction of 0.50 million of Open Interest in the January month futures contract, followed by Reliance Industries witnessing a contraction of 2.15 million of Open Interest in the January month contract; State Bank of India witnessed an addition of 0.08 million of Open Interest in the January month contract; Axis Bank witnessed contraction of 2.02 million of Open Interest in the January month contract and ONGC witnessed a contraction of 0.20 million of Open Interest in the January month's future contract.?