Nifty ends flat with positive bias; takes support at 8900 level

After witnessing rally for eight consecutive sessions, fifty-stock index, Nifty, witnessed profit booking at higher levels and ended the session on flat note with a positive bias ahead of the expiry of January derivative contracts tomorrow. Sentiments got support as Finance Minister Arun Jaitley exuded confidence that fiscal deficit targets for current year are likely to be met and manufacturing sector is showing turnaround signs. The Finance Minister also stated that our currency is one of those two global currencies that withstood the might of the US dollar and most of the global currencies are still under pressure. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 953.50 crore on January 27, 2014. However, gains remained capped on absence of positive trigger and prevailing caution ahead of U.S. Fed meeting outcome due later in the day amidst hopes that U.S. Federal Reserve could take a dovish stance in its post-meeting statement later in the day. Besides, incremental profit-booking activities by participants after eight consecutive sessions of winning streak in the backdrop of daunting global set-up mainly led to mixed session of trade. 

After cautious opening, nifty traded near neutral line alternating between positive and negative territory in morning trade, but it was early afternoon trade when nifty showed its strength breached crucial 8950 mark and touched intraday high. However, the sentiments turned pessimistic in late afternoon trades and index plunged lower as European counterparts drifted downward after a positive start. Market, for rest of the session, see-sawed around the neutral line as investors remained on the sidelines in the absence of any significant trigger at domestic front. Eventually, Nifty ended the session taking support above its crucial 8,900 mark with positive bias.

Most of the sectoral indices on the NSE settled in the positive territory with CNX Realty gaining the most, ending with a gain of over a percentage point followed by CNX IT up by 0.99% and CNX Energy up by 0.99% while, CNX Metal down 1.46%, CNX Auto down 0.62% and CNX Media up by 0.56% remained the major losers on NSE sectoral space.

The top gainers from the F&O segment were Titan Company, IRB Infrastructure Developers and Voltas. On the other hand, the top losers were Union Bank of India, Bharti Airtel and United Breweries. In the index options segment, maximum OI continues to be seen in the 8900-9000 calls and 8800-8700 puts indicating the expected trading range.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 9.32% and reached 19.77. The 50-share CNX Nifty was up by 3.80 points or 0.04% to settle at 8,914.30. Nifty January 2015 futures closed at 8904.65 on Wednesday at a discount of 9.65 points over spot closing of 8914.30, while Nifty February 2015 futures ended at 8967.10 at a premium of 52.80 points over spot closing. Nifty January futures saw contraction of 5.36 million (mn) units, taking the total outstanding open interest (OI) to 10.71 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 0.20 points at 333.60 compared with spot closing of 333.40. The number of contracts traded were 40,984.

ICICI Bank January 2015 futures traded at a premium of 1.80 points at 384.20 compared with spot closing of 382.40. The number of contracts traded were 36,219.

Tata Steel January 2015 futures traded at a premium of 1.20 points at 390.95 compared with spot closing of 389.75. The number of contracts traded were 29,513.

Axis Bank January 2015 futures traded at a premium of 1.00 points at 590.80 compared with spot closing of 589.80. The number of contracts traded were 41,808.

Tata Motors January 2015 futures traded at a discount of 0.15 points at 587.90 compared with spot closing of 588.05. The number of contracts traded were 29,288.

Among Nifty calls, 9000 SP from the January month expiry was the most active call with an addition of 0.49 million open interests. Among Nifty puts, 8,800 SP from the January month expiry was the most active put with an addition of 0.58 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.23 mn) and that for Puts was at 8,700 SP (4.79 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8974.88--- Pivot Point 8924.47--- Support --- 8863.88.

The Nifty Put Call Ratio (PCR) finally stood at 1.87 for January month contract. The top five scrips with highest PCR on OI were Ultratech Cement (1.97), YES Bank (1.76), AXIS Bank (1.66), DLF (1.65) and Grasim (1.63). 

Among most active underlying, HDFC Bank witnessed a contraction of 9.49 million of Open Interest in the January month futures contract, followed by Reliance Industries witnessing a contraction of 9.04 million of Open Interest in the January month contract; Axis Bank witnessed a contraction of 5.93 million of Open Interest in the January month contract, State Bank of India witnessed a contraction of 15.74 million of Open Interest in the January month contract and Infosys witnessed a contraction of 1.85 million of Open Interest in the January month's future contract.