Nifty showcases smart recovery; ends just below 9000 mark

The fifty stock index -- Nifty -- showcased a smart recovery led by buying in metal and mining stocks after some metal companies said that they have won coal mines under the ongoing coal e-auction. The auction follows a court cancellation of all previous licenses and the initial bidding suggests companies are keen to secure supplies as the economy improves. Some support also came after global rating agency Fitch said that it was expecting a slew of reforms in the upcoming Union Budget and any deviation from fiscal consolidation path could be a negative for its investment grade rating for India. Furthermore, investors remain hopeful of faster reforms in the government's 2015/16 fiscal budget, due to be presented on February 28, after Modi's party was routed in the Delhi state elections. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 2,187.96 crore on February 18, 2015.

After gap up opening, nifty showed some strength in morning trades, but the sentiments turned pessimistic in late morning trades and index drifted lower due to profit booking in frontline line blue-chip stocks. Market, trading below the neutral for most part of the session thereafter, came back to life on value buying in dying hours to end the session in the green, recapturing its crucial 8,850 mark.

Most of the sectoral indices on the NSE settled in the negative territory with CNX PSU Bank losing the most, ending with a gain of over a percent followed CNX FMCG down by 0.83% and Bank Nifty down by 0.41%, while CNX Metal up 3.54%, CNX IT up 0.74% and CNX Realty up by 0.72% remained the top gainers on NSE sectoral space.

The top gainers from the F&O segment were Jindal Steel & Power, JSW Steel and Adani Power. On the other hand, the top losers were Aurobindo Pharma, Idea Cellular and Jubilant Foodworks. In the index options segment for February series, maximum OI continues to be seen in the 9000-8900 calls and 8600-8700 puts indicating the expected trading range.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 2.46% and reached 20.39. The 50-share CNX Nifty was up by 26.20 points or 0.30% to settle at 8,895.30.

Nifty February 2015 futures closed at 8916.15 on Thursday at a premium of 20.85 points over spot closing of 8895.30, while Nifty March 2015 futures ended at 8972.95 at a premium of 77.65 points over spot closing. Nifty February futures saw contraction of 0.67 million (mn) units, taking the total outstanding open interest (OI) to 24.87 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 3.10 points at 303.60 compared with spot closing of 300.50. The number of contracts traded were 38,567.

ICICI Bank February 2015 futures traded at a premium of 0.35 points at 340.35 compared with spot closing of 340.00. The number of contracts traded were 21,223.

HDFC Bank February 2015 futures traded at a premium of 1.35 points at 1083.35 compared with spot closing of 1082.00. The number of contracts traded were 25,258.

Reliance Industries February 2015 futures traded at a premium of 3.15 points at 904.30 compared with spot closing of 901.15. The number of contracts traded were 23,124.

Axis Bank February 2015 futures traded at a premium of 1.45 points at 567.65 compared with spot closing of 566.20. The number of contracts traded were 29,898.Among Nifty calls, 8900 SP from the February month expiry was the most active call with an addition of 0.05 million open interests. Among Nifty puts, 8800 SP from the February month expiry was the most active put with an addition of 0.48 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.08 mn) and that for Puts was at 8,800 SP (4.31 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8941.02 --- Pivot Point 8867.73 --- Support --- 8822.02.

The Nifty Put Call Ratio (PCR) finally stood at 1.06 for February month contract. The top five scrips with highest PCR on OI were HCL Tech (1.44), Infosys (1.17), Syndicate Bank (1.17), HDIL (1.16) and Tata Motors - DVR (1.08). 

Among most active underlying, Jindal Steel & Power witnessed a contraction of 4.64 million of Open Interest in the February month futures contract, followed by State Bank of India witnessing a contraction of 0.39 million of Open Interest in the February month contract; Larsen & Toubro witnessed a contraction of 0.08 million of Open Interest in the February month contract, Axis Bank witnessed a contraction of 2.55 million of Open Interest in the February month contract and ICICI Bank witnessed a contraction of 3.64 million of Open Interest in the February month's future contract.