Nifty bounces back to close above 8,700 mark

CNX Nifty bounced back in the last hour of trade to close higher on Tuesday after Finance Minister Arun Jaitley said that India’s current account deficit will hopefully be less than 1% of gross domestic product (GDP) in the fiscal year that begins in April. On the global front, Asian stock indices ended mostly higher as investors positioned for the possibility that weaker-than-expected US data will prompt the Federal Reserve to leave its options open this week on the timing of a future rate hike. Meanwhile, most of European markets also made a positive opening in the early deals on Tuesday.

Back home, the Indian equity benchmark made a gap up opening buoyed by global cues as the US markets edged higher overnight. In the morning session, market traded in green as sentiments got a boost with IMF chief Christine Lagarde’s statement that Indian economy is poised to overtake the combined GDP of Japan and Germany in the next four years on the back of recent policy reforms and improved business confidence in the country. However, market pared most of its early gains in early afternoon as investors turned cautious and booked profits ahead of the US Federal Reserve at its two-day policy meet, which begins later today. Sentiment on the street weakened further on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 763 crore on March 16, 2015. However, in the last leg of trade, market recovered sharply after Finance Minister announced that the economy is estimated to grow at 7.4 per cent during the current fiscal, which is likely to go above 8 per cent in the next fiscal. Traders were seen piling positions in Capital Goods, FMCG and Consumer Durables stocks while selling was witnessed in IT and TECK sector stocks. Finally, Nifty ended the session with a gain of over a percent reclaiming its crucial 8,700 mark.  

The top gainers from the F&O segment were Hindalco Industries, JSW Energy and Dabur India. On the other hand, the top losers were Jindal Steel & Power, Century Textiles & Industries and Indiabulls Real Estate. In the index options segment for March series, maximum OI continues to be seen in the 9000-8900 calls and 8500-8400 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 0.32% and reached 15.12. The 50-share CNX Nifty was up by 90.15 points or 1.04% to settle at 8,723.30. Nifty March 2015 futures closed at 8740.20 on Tuesday at a premium of 16.90 points over spot closing of 8,723.30, while Nifty April 2015 futures ended at 8811.10 at a premium of 87.80 points over spot closing. Nifty March futures saw contraction of 0.85 million (mn) units, taking the total outstanding open interest (OI) to 24.13 million (mn) units. The near month derivatives contract will expire on March 26, 2015.

From the most active contracts, SBI March 2015 futures traded at a premium of 0.80 points at 284.30 compared with spot closing of 283.50. The number of contracts traded were 21,291.

ICICI Bank March 2015 futures traded at a premium of 0.30 points at 335.80 compared with spot closing of 335.50. The number of contracts traded were 21,633.

HDFC Bank March 2015 futures traded at a premium of 8.50 points at 1065.05 compared with spot closing of 1056.55. The number of contracts traded were 26,240.

Reliance Industries March 2015 futures traded at a premium of 4.25 points at 860.30 compared with spot closing of 856.05. The number of contracts traded were 26,670.

Axis Bank March 2015 futures traded at a premium of 0.90 points at 583.85 compared with spot closing of 582.95. The number of contracts traded were 35,359.

Among Nifty calls, 8800 SP from the March month expiry was the most active call with a contraction of 0.61 million open interests. Among Nifty puts, 8700 SP from the March month expiry was the most active put with an addition of 0.57 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.43 mn) and that for Puts was at 8,400 SP (4.88 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8766.97 --- Pivot Point 8698.88 --- Support --- 8655.22.

The Nifty Put Call Ratio (PCR) finally stood at 0.95 for March month contract. The top five scrips with highest PCR on OI were Ranbaxy (1.02), Bharti Airtel (1.01), SUN TV (0.98), Cairn (0.82) and Sun Pharma (0.79). 

Among most active underlying, Wockhardt witnessed an addition of 0.15 million of Open Interest in the March month futures contract, followed by JSPL witnessing an addition of 1.33 million of Open Interest in the March month contract; Axis Bank witnessed a contraction of 0.35 million of Open Interest in the March month contract, State Bank of India witnessed a contraction of 1.93 million of Open Interest in the March month contract and ICICI Bank witnessed a contraction of 0.91 million of Open Interest in the March month's future contract.