Nifty ends flat with positive bias; takes support at 8750 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 cheered President Pranab Mukherjee’s statement that the latest estimates of India’s GDP growth making it the fastest growing large economy in the world, is the Narendra Modi-led government’s most significant achievement till date. Mukherjee also said that the government had taken several initiatives including smart cities, skill development, ease of doing business and tapping the country's demographic dividend. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 602 crore on February 23, 2015. However, profit booking emerged at higher levels as traders turned cautious ahead of key events including Economic Survey, Railway Budget and Union Budget along with the expiry of February series later during the week. Besides, prevailing risk-off sentiment ahead of Yellen's appearance before the US Senate Banking Committee and cautiousness ahead of F&O expiry on Thursday was also weighing on the sentiment. Market, for most of the session, see-sawed around the neutral line as some investors remained on the sidelines in the absence of any significant trigger at domestic front. Eventually, Nifty ended the session slightly in the positive terrain with a gain of seven points.

Investors are bracing for a busy second half of the week with the government due to unveil the railway budget on Thursday, followed by its economic survey on Friday, and the fiscal 2015/16 budget on Saturday. Investors will look for the direction of government policy through these two announcements and will keep an eye on annual economic outlook survey. Furthermore, the market is likely to remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month February 2015 series to March 2015 series. The February derivatives contracts expire on Thursday.

Most of the sectoral indices on the NSE settled in the negative territory with CNX Metal loosing the most, ending with a gain of over a percent followed CNX Energy down by 0.95% and CNX PSU Bank up by 0.58%, while CNX FMCG up 1.50%, CNX Media up 1.27% and CNX Realty up by 0.44% remained the top gainers on NSE sectoral space.

The top gainers from the F&O segment were Adani Enterprises, Jubilant Foodworks and Unitech. On the other hand, the top losers were TVS Motor Company, JSPL and Shriram Transport Finance Company. In the index options segment for February series, maximum OI continues to be seen in the 9000-8900 calls and 8600-8500 puts indicating the expected trading range.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 0.38% and reached 21.55. The 50-share CNX Nifty was up by 7.15 points or 0.08% to settle at 8,869.10. Nifty February 2015 futures closed at 8773.30 on Tuesday at a premium of 11.10 points over spot closing of 8762.10, while Nifty March 2015 futures ended at 8825.20 at a premium of 63.10 points over spot closing. Nifty February futures saw contraction of 3.82 million (mn) units, taking the total outstanding open interest (OI) to 12.70 million (mn) units. The near month derivatives contract will expire on February 26, 2015.

From the most active contracts, HDFC Bank February 2015 futures traded at a discount of 1.25 points at 1066.40 compared with spot closing of 1067.65. The number of contracts traded were 56,203.

Reliance Industries February 2015 futures traded at a premium of 2.45 points at 843.90 compared with spot closing of 841.45. The number of contracts traded were 49,655.

HDFC Bank March 2015 futures traded at a premium of 11.50 points at 1079.15 compared with spot closing of 1067.65. The number of contracts traded were 47,191.

SBI February 2015 futures traded at a premium of 0.25 points at 296.50 compared with spot closing of 296.25. The number of contracts traded were 39,536.

Axis Bank February 2015 futures traded at a premium of 1.70 points at 553.50 compared with spot closing of 551.80. The number of contracts traded were 39,444.Among Nifty calls, 8800 SP from the February month expiry was the most active call with a contraction 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 0.15 million open interests. The maximum OI outstanding for Calls was at 9000 SP (7.08 mn) and that for Puts was at 8,700 SP (4.49 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8799.48--- Pivot Point 8763.12--- Support --- 8725.73.

The Nifty Put Call Ratio (PCR) finally stood at 0.88 for February month contract. The top five scrips with highest PCR on OI were TCS (1.29), Syndicate Bank (1.19), SUN TV (1.27), HCL Tech (1.16) and ACC (1.15). 

Among most active underlying, State Bank of India witnessed a contraction of 13.12 million of Open Interest in the February month futures contract, followed by HDFC Bank witnessing a contraction of 9.42 million of Open Interest in the February month contract; Reliance Industries witnessed a contraction of 5.64 million of Open Interest in the February month contract, ICICI Bank witnessed a contraction of 8.85 million of Open Interest in the February month contract and Larsen & Toubro witnessed a contraction of 2.12 million of Open Interest in the February month's future contract.