Nifty extend gains for third consecutive session; closes above 8700 level

The fifty stock index -- Nifty -- continued its bull run for third straight session and closed the wonderful day of trade with gain of 84 points or 0.98%, on expectations of faster economic reforms by the government and optimism over the forthcoming Budget. Sentiments got a boost with reports that Russia has agreed to cease-fire with Ukraine. The deal reached after all-night negotiations in the Belarussian capital Minsk included a ceasefire that would come into effect on February 15, followed by the withdrawal of heavy weapons. Some support also came in with a private study of MasterCard consumer confidence index, which has said that India is the second most optimistic nation among the Asia Pacific Region after Myanmar, scoring 91.6 in the index which is calculated with zero as the most pessimistic and 100 as the most optimistic. However, depreciation in rupee value against the dollar and continuous sell-off by foreign funds weighed on the sentiment. FPIs sold shares worth Rs 371.27 crore on February 11, 2015. Meanwhile, some traders remained on the sidelines and refrained from any buying activity ahead of the important macro data, Industrial production (IIP) data for December 2014 and data for inflation based on combined consumer price index (CPI) for January 2015 are slated to be announced later in the day.

After gap up opening, nifty showed some strength in morning trades, but the sentiments turned weak in afternoon trades and index started drifting lower, however the market regained its momentum in the final hour of trade and finished the day gaining about a percent. 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 two and half percent followed CNX Pharma up by 1.81% and CNX Auto up by 0.96%, while CNX PSU Bank down 0.88% and CNX FMCG down by 0.13% remained the losers on NSE sectoral space.

The top gainers from the F&O segment were India Cements, MRF and Bosch. On the other hand, the top losers were Bank of India, Hindustan Zinc and CESC. In the index options segment for February series, maximum OI continues to be seen in the 9000-8900 calls and 8500-8600 puts indicating the expected trading range.  Meanwhile, India VIX - the gauge of underlying volatility in the market - has declined in today's session, which indicates that traders have slowdown buying options contracts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.68% and reached 20.15. The 50-share CNX Nifty was up by 84.15 points or 0.98% to settle at 8,711.55. Nifty February 2015 futures closed at 8752.20 on Thursday at a premium of 40.65 points over spot closing of 8711.55, while Nifty March 2015 futures ended at 8805.75 at a premium of 94.20 points over spot closing. Nifty February futures saw an addition of 0.49 million (mn) units, taking the total outstanding open interest (OI) to 25.30 million (mn) units. The near month derivatives contract will expire on February 26, 2015.

From the most active contracts, State Bank of India February 2015 futures traded at a premium of 0.20 points at 286.30 compared with spot closing of 286.10. The number of contracts traded were 35,053.

ICICI Bank February 2015 futures traded at a premium of 1.30 points at 341.50 compared with spot closing of 340.20. The number of contracts traded were 22,609.

HDFC Bank February 2015 futures traded at a premium of 6.75 points at 1081.15 compared with spot closing of 1074.40. The number of contracts traded were 20,910.

Reliance Industries February 2015 futures traded at a premium of 3.10 points at 915.65 compared with spot closing of 912.55. The number of contracts traded were 18,617.

Axis Bank February 2015 futures traded at a discount of 0.35 points at 581.15 compared with spot closing of 581.50. The number of contracts traded were 29,536.Among Nifty calls, 8800 SP from the February month expiry was the most active call with an addition of 0.25 million open interests. Among Nifty puts, 8600 SP from the February month expiry was the most active put with an addition of 0.72 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.17 mn) and that for Puts was at 8,500 SP (4.22 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8762.98--- Pivot Point 8681.12--- Support --- 8629.68.

The Nifty Put Call Ratio (PCR) finally stood at 0.91 for February month contract. The top five scrips with highest PCR on OI were Infosys (1.21), HDIL (1.19), HCL Tech (1.14), Wockhardt (1.03) and ACC (1.01). 

Among most active underlying, State Bank of India witnessed an addition of 1.96 million of Open Interest in the February month futures contract, followed by ICICI Bank witnessing a correction of 0.17 million of Open Interest in the February month contract; Larsen & Toubro witnessed an addition of 8.57 million of Open Interest in the February month contract, Axis Bank witnessed an addition of 0.28 million of Open Interest in the February month contract and Bank of India witnessed an addition of 1.59 million of Open Interest in the February month's future contract.