Bulls continue to show aggression; Nifty ends above 8800 level

The fifty stock index -- Nifty -- staged a blockbuster performance on the last day of the week by vehemently rallying over a percentage point in the session and re-conquering their psychological levels on the back of firm global cues. Globally, the sentiment remained supportive after European leaders and Russia agreed a plan to end Ukraine’s 10-month war. Furthermore, investors are hopeful for faster reforms at the government's 2015-16 fiscal budget due on February 28 after the Prime Minister Narendra Modi-led party was routed in Delhi state elections.

After a positive opening, the index extended its gains as sustained buying was witnessed mostly in all the key heavyweights. Afterwards, the local index reclaimed its crucial 8,750 mark in morning trade as investors piled up stocks after Finance minister Arun Jaitley said that his government will not let the Delhi election drubbing impact key economic policy changes. Some support also came in with the government’s statement that it has collected Rs 4.27 lakh crore, or 68.6 percent of budget target for indirect tax, in the April-January period of this fiscal. The budget target for indirect tax collections is Rs 6.23 lakh crore. Market continued their strong run till mid noon trade. Last leg of trade brought some more cheer to the market and it touched its intraday high after (SBI) managed to stem rise in bad loans in its fiscal third quarter and reported 30% increase in net profit for the December ended quarter. Further, better than-expected quarterly earnings posted by blue chip companies including Cipla and M&M also boosted the trading sentiments. Eventually, Nifty ended the session above its crucial 8,800 mark with a gain of over a percentage point.

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 five and half percent followed CNX FMCG up by 1.85% and CNX Pharma up by 1.65%, while CNX Realty down 0.96% remained the sole losers on NSE sectoral space.

The top gainers from the F&O segment were Mcleod Russel India, SBI and Biocon. On the other hand, the top losers were India Cements, GAIL and BHEL. 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 0.27% and reached 20.10. The 50-share CNX Nifty was up by 93.95 points or 1.08% to settle at 8,805.50. Nifty February 2015 futures closed at 8841.55 on Friday at a premium of 36.05 points over spot closing of 8805.50, while Nifty March 2015 futures ended at 8897.10 at a premium of 91.60 points over spot closing. Nifty February futures saw an addition of 0.50 million (mn) units, taking the total outstanding open interest (OI) to 25.80 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 1.20 points at 308.90 compared with spot closing of 307.70. The number of contracts traded were 163,007.

ICICI Bank February 2015 futures traded at a premium of 1.35 points at 345.10 compared with spot closing of 343.75. The number of contracts traded were 19,544.

HDFC Bank February 2015 futures traded at a premium of 7.40 points at 1073.35 compared with spot closing of 1065.95. The number of contracts traded were 21,109.

Reliance Industries February 2015 futures traded at a premium of 1.75 points at 921.80 compared with spot closing of 920.05. The number of contracts traded were 15,814.

BHEL February 2015 futures traded at a discount of 3.10 points at 256.30 compared with spot closing of 259.40. The number of contracts traded were 21,392.

Among Nifty calls, 8900 SP from the February month expiry was the most active call with a contraction of 0.40 million open interests. Among Nifty puts, 8700 SP from the February month expiry was the most active put with an addition of 0.94 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 (4.13 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8841.85 --- Pivot Point 8785.75 --- Support --- 8749.40.

The Nifty Put Call Ratio (PCR) finally stood at 1.04 for February month contract. The top five scrips with highest PCR on OI were HDIL (1.22), Infosys (1.19), HCL Tech (1.18), Syndicate Bank (1.14) and Wockhardt (1.09). 

Among most active underlying, State Bank of India witnessed an addition of 8.52 million of Open Interest in the February month futures contract, followed by Cipla witnessing an addtion of 0.43 million of Open Interest in the February month contract; ICICI Bank witnessed a contraction of 2.88 million of Open Interest in the February month contract, Axis Bank witnessed a contraction of 0.59 million of Open Interest in the February month contract and Larsen & Toubro witnessed a contraction of 0.10 million of Open Interest in the February month's future contract.