Nifty makes triple digit gains; closes above 8800 level

Making a smart bounce back, Nifty surged with triple digit gains on Friday, as the benchmark, after a positive start continued its strong momentum till the end of the session. There was broad based buying that emerged on hopes the government would deliver a budget that increases public investment but sticks broadly to its fiscal deficit targets. Traders also took cues from Economic Survey, which estimated economic growth between 8.1% and 8.5% in 2015-16 and announced the scope of big bang reforms in the budget, which is to be tabled in parliament on February 28, 2015. Sentiments were further buttressed after survey suggested that the government’s fiscal deficit of 4.1% for FY15 of likely being achieved by the economy. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 2312.15 crore on February 26, 2015. Besides, beginning of March series in the derivatives segment supported the upside in stock prices.   

After a positive opening, market started extending its gains on sustained buying witnessed in all key heavyweights along with broader indices. The index reclaimed its crucial 8,750 mark as investor sentiments got buoyed with positive statement of the global rating agency S&P that India’s per capita income, a gauge for assessing standard of living, rose by 37.6 per cent to Rs. 88,533 in the last four years to 2014-15. Second half of trade brought some more cheer to the market and it touched its intraday highs as investor sentiment got a boost from good macro-economic numbers for 2014-15 which will be the basis of the 2015/16 budget to be unveiled by Finance Minister Arun Jaitley on Saturday. Eventually, Nifty finished the session near its intraday high and recaptured its crucial 8,800 mark with a gain of over 160 points supported by index heavyweights viz, Bank of Baroda, Tata Power, L&T and UltraTech Cement.

Barring FMCG, all other NSE sectoral indices ended significantly in the red. Among them, CNX realty index was the star-performer and was up 4.46 percent, followed by CNX PSU Bank 4.09 percent and CNX Metal 3.03 per cent, while CNX FMCG index was down 0.03 percent.

The top gainers from the F&O segment were Siemens, Jain Irrigation Systems and LIC Housing Finance. On the other hand, the top losers were Apollo Hospitals Enterprise, Havells India and Tata Chemicals. Meanwhile, India VIX - the gauge of underlying volatility in the market - has declined in today's session, which indicates that traders have decided to stay away from option contracts ahead of the annual budget.  

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 4.91% and reached 19.57. The 50-share CNX Nifty was up by 160.75 points or 1.85% to settle at 8,844.60. Nifty March 2015 futures closed at 8889.95 on Friday at a premium of 45.35 points over spot closing of 8844.60, while Nifty April 2015 futures ended at 8947.90 at a premium of 103.30 points over spot closing. Nifty March futures saw an addition of 0.20 million (mn) units, taking the total outstanding open interest (OI) to 24.19 million (mn) units. The near month derivatives contract will expire on March 26, 2015.

From the most active contracts, Unitech March 2015 futures traded at a premium of 0.30 points at 21.80 compared with spot closing of 21.50. The number of contracts traded were 24,159.

SBI March 2015 futures traded at a premium of 1.15 points at 301.40 compared with spot closing of 300.25. The number of contracts traded were 33,536.

ICICI Bank March 2015 futures traded at a premium of 1.20 points at 337.20 compared with spot closing of 336.00. The number of contracts traded were 24,570.

HDFC Bank March 2015 futures traded at a premium of 12.80 points at 1067.20 compared with spot closing of 1054.40. The number of contracts traded were 24,944.

Reliance Industries March 2015 futures traded at a premium of 3.00 points at 862.30 compared with spot closing of 859.30. The number of contracts traded were 17,719.Among Nifty calls, 9000 SP from the March month expiry was the most active call with an addition of 1.41 million open interests. Among Nifty puts, 8500 SP from the March month expiry was the most active put with an addition of 0.98 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.27 mn) and that for Puts was at 8,500 SP (4.27 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8895.22 --- Pivot Point 8806.33 --- Support --- 8755.72.

The Nifty Put Call Ratio (PCR) finally stood at 0.97 for March month contract. The top five scrips with highest PCR on OI were Mcleod Russel India (1.30), STAR (1.27), Dr. Reddy's Laboratories (1.14), Hexaware (1.12) and ITC (1.08). 

Among most active underlying, Larsen & Toubro witnessed an addition of 0.52 million of Open Interest in the March month futures contract, followed by State Bank of India witnessing a contraction of 0.82 million of Open Interest in the March month contract; ICICI Bank witnessed a contraction of 1.70 million of Open Interest in the March month contract, Jindal Steel & Power witnessed an addition of 1.67 million of Open Interest in the March month contract and Bosch witnessed an addition of 0.07 million of Open Interest in the March month's future contract.