Nifty ends above 8,800 on ECB stimulus move

Prolonging its gaining streak for seventh day in a row, Nifty ended the Friday’s trade with a gain of around a percent on hopes of additional foreign investments after the European Central Bank launched a landmark bond-buying stimulus programme. Some support also came in with Finance Minister Arun Jaitley assuring that the government will keep up the pace of reforms but said he doesn’t want to build expectations in the run up to the Budget. Sentiments also remained up-beat on reports that foreign institutional investors were net buyers in Indian equities worth Rs 593 crore on Thursday, as per provisional stock exchange data. Appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 61.58 per dollar at the time of equity market closing against the Thursday’s close of 61.69 on the Interbank Foreign Exchange.

After a gap up opening, nifty pared some of its early gains but managed to trade above its crucial 8,800 mark and ended comfortably above the said psychological level, first time in a history of NSE, with a gain of around a percentage point. Most of the sectoral indices on the NSE settled in the positive territory with CNX Auto gaining the most, ending with a gain of one and a half percent followed by CNX Realty up by 1.25% and CNX Pharma up by 0.88% while, CNX Media down 0.12% remained the lone loser on NSE sectoral space.

The top gainers from the F&O segment were Adani Enterprises, Adani Power and Dish TV. On the other hand, the top losers were Mahindra and Mahindra Finance, Shriram Transport Finance and Biocon. In the index options segment, maximum OI continues to be seen in the 8900-9000 calls and 8500-8600 puts indicating the expected trading range. Some profit booking was seen in 8600, 8700 and 8800 calls, which contracted by 6.28, 2.27 and 4.78 lakh shares, respectively. On the other hand, 8900, 8800 and 8700 Put strikes saw addition of 5.61, 20.24 and 1.92 lakh shares, respectively.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 0.68 or 3.66% and reached 17.88. The 50-share CNX Nifty was up by 74.20 points or 0.85% to settle at 8,835.60.

Nifty January 2015 futures closed at 8844.40 on Friday at a premium of 8.80 points over spot closing of 8835.60, while Nifty February 2015 futures ended at 8898.55 at a premium of 62.95 points over spot closing. Nifty January futures saw an addition of 0.09 million (mn) units, taking the total outstanding open interest (OI) to 22.75 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 0.85 points at 327.90 compared with spot closing of 327.05. The number of contracts traded were 32,848.

ICICI Bank January 2015 futures traded at a premium of 2.40 points at 371.40 compared with spot closing of 369.00. The number of contracts traded were 24,934.

HDFC Bank January 2015 futures traded at a premium of 5.15 points at 1047.15 compared with spot closing of 1042.00. The number of contracts traded were 50,733.

Reliance Industries January 2015 futures traded at a premium of 2.80 points at 889.65 compared with spot closing of 886.85. The number of contracts traded were 28,415.

Axis Bank January 2015 futures traded flat compared with spot closing of 566.00. The number of contracts traded were 35,438.

Among Nifty calls, 9,000 SP from the January month expiry was the most active call with an addition of 3,000 units open interests. Among Nifty puts, 8,500 SP from the January month expiry was the most active put with contraction of 0.24 million open interests. The maximum OI outstanding for Calls was at 9,000 SP (4.39 mn) and that for Puts was at 8,500 SP (4.90 mn).

The respective Support and Resistance levels of Nifty are: Resistance 8869.53--- Pivot Point 8832.47--- Support --- 8798.53.

The Nifty Put Call Ratio (PCR) finally stood at 1.72 for January month contract.

The top five scrips with highest PCR on OI were Cairn India (1.64), Infosys (1.62), Yes Bank (1.55), Grasim Industries (1.40) and DLF (1.39).

Among most active underlying, HDFC Bank witnessed contraction of 5.29 million of Open Interest in the January month futures contract, followed by Reliance Industries witnessing a contraction of 1.05 million of Open Interest in the January month contract; Axis Bank witnessed contraction of 2.65 million of Open Interest in the January month contract; ONGC witnessed a contraction of 0.67 million of Open Interest in the January month's future contract and Tata Steel witnessed contraction of 2.21 million of Open Interest in the January month contract.