Nifty ends flat with positive bias; takes support at 8800 level

The local benchmark, Nifty consolidated and ended the choppy day of trade on a flat note with positive bias. The index opened in the green as investors got confidence with Prime Minister Narendra Modi assuring more reforms while rolling out the red carpet to investors, especially the multinationals, inviting them to make use of the large pool of highly talented youth in the country. Besides, a firming trend at other Asian markets coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. However, profit booking emerged at higher levels as traders turned cautious ahead of the next and crucial round of fraught negotiations between Greece and its international creditors. Traders completely neglected WPI inflation, which came below 0 at -0.39% in January, as compared to 0.11% in December on the back of sharp correction in oil prices. Meanwhile, annual rate of inflation based on WPI was revised downward to negative 0.17% for November 2014, from a figure of zero reported earlier.

After gap up opening, nifty showed some strength in morning trades, but the sentiments turned pessimistic in late morning trades and index drifted lower as some selling appeared in the high beta bluechip stocks ahead of the WPI inflation data for January. Thereafter market traded in the tight range till mid afternoon trade but, it was the final hour of trade where market witnessed steep fall of about 60 points as banking stocks came under selling pressure after a sharp up-move in the past few sessions. Some last minute short covering helped the index to end session in the positive territory.

Most of the sectoral indices on the NSE settled in the negative territory with Bank Nifty losing the most, ending with a gain of over a percent followed CNX Pharma down by 0.95% and CNX Media down by 0.65%, while CNX FMCG up 1.84%, CNX Realty up 1.10% and CNX Auto up by 0.35% remained the top gainers on NSE sectoral space.

The top gainers from the F&O segment were Unitech, HDIL and Reliance Communications. On the other hand, the top losers were CESC, Hindustan Petroleum Corporation and Just Dial. In the index options segment for February series, maximum OI continues to be seen in the 9000-8900 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 3.59% and reached 20.82. The 50-share CNX Nifty was up by 3.85 points or 0.04% to settle at 8,809.35.

Nifty February 2015 futures closed at 8845.05 on Monday at a premium of 35.70 points over spot closing of 8809.35, while Nifty March 2015 futures ended at 8899.95 at a premium of 90.60 points over spot closing. Nifty February futures saw an addition of 0.24 million (mn) units, taking the total outstanding open interest (OI) to 26.04 million (mn) units. The near month derivatives contract will expire on February 26, 2015.

From the most active contracts, Unitech February 2015 futures traded at a premium of 0.05 points at 18.55 compared with spot closing of 18.50. The number of contracts traded were 15,548.

State Bank of India February 2015 futures traded at a premium of 1.30 points at 307.80 compared with spot closing of 306.50. The number of contracts traded were 45,089.

ICICI Bank February 2015 futures traded at a premium of 1.75 points at 339.60 compared with spot closing of 337.85. The number of contracts traded were 15,894.

HDFC Bank February 2015 futures traded at a premium of 8.65 points at 1072.35 compared with spot closing of 1063.70. The number of contracts traded were 20,092.

Reliance Industries February 2015 futures traded at a premium of 5.90 points at 908.05 compared with spot closing of 902.15. The number of contracts traded were 21,485.Among Nifty calls, 8900 SP from the February month expiry was the most active call with an addition of 1.05 million open interests. Among Nifty puts, 8800 SP from the February month expiry was the most active put with an addition of 0.55 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.23 mn) and that for Puts was at 8,800 SP (3.62 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8855.17 --- Pivot Point 8824.28 --- Support --- 8778.47.

The Nifty Put Call Ratio (PCR) finally stood at 0.98 for February month contract. The top five scrips with highest PCR on OI were HDIL (1.23), HCL Tech (1.20), Syndicate Bank (1.20), Infosys (1.04) and ACC (1.02). 

Among most active underlying, State Bank of India witnessed a contraction of 2.61 million of Open Interest in the February month futures contract, followed by Axis Bank witnessing an addition of 0.17 million of Open Interest in the February month contract; ICICI Bank witnessed an addition of 1.04 million of Open Interest in the February month contract, Reliance Industries witnessed an addition of 0.25 million of Open Interest in the February month contract and Infosys witnessed a contraction of 0.11 million of Open Interest in the February month's future contract.