Nifty extends gains for second consecutive session; closes above 8650 level

The fifty stock index -- Nifty -- continued its northward journey for second consecutive day on Monday and finished the calming day of trade with a gain of 73 points or 0.86%, as traders churned positions in favour of defensive stocks a day ahead of central bank's policy review. On global front, Asian stock markets mostly ended higher after weaker-than-expected US jobs data raised doubts the Federal Reserve would hike interest rates any time soon. Meanwhile, the European markets were closed today on account of ‘Easter Monday’ holiday.

Back home, the Indian equity benchmark made a positive start buoyed by a firm trend in other Asian markets. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 210 crore on April 01, 2015. Although, in the late morning session, Nifty pared all its early gains and slipped into red as services sector growth in India eased marginally due to rise in input costs during March, according to HSBC survey. Also, there was some concern in the markets with nearly 100 foreign funds being asked to cough up an estimated $5-6 billion for 'untaxed gains' made by them in the Indian markets over the past years. These FIIs, many of whom have now converted themselves into FPIs include entities from the US and Europe as also those operating through Singapore, Hong Kong and Mauritius. Further, in absence of any major cues, the market trade continued to remain range-bound in the mid-noon session too as investors avoided taking long positions ahead of RBI’s first bi-monthly Monetary Policy for 2015-16 scheduled on April 7, 2015. Governor Raghuram Rajan’s action can either send stocks soaring or crashing, depending on whether rates are cut or status quo is maintained. However, in the second half, market pared its losses and turned positive on account of buying in front line counters. The sentiments turned optimistic on expectations that the government would table the GST Constitutional Amendment Bill in the Lok Sabha very soon. Market extended its gains till the end of session on account of buying in Realty, FMCG, Consumer Durables and Capital Goods stocks. Finally, Nifty ended the session at its intra-day high level with a gain of 73 points. 

The top gainers from the F&O segment were Housing Development and Infrastructure, Sun Pharmaceuticals Industries and Unitech. On the other hand, the top losers were Sun TV Network, Reliance Infrastructure and Federal Bank. In the index options segment, maximum OI continues to be seen in the 9000-8800 calls and 8400-8300 puts indicating the expected trading range. In today's session, the 8800, 8900 and 9000 Call strikes saw addition of 5.80, 7.59 and 2.88 lakh shares, respectively. On the other hand, 8600, 8400 and 8200 Put strikes saw addition of 7.52, 3.24 and 3.43 lakh shares, respectively. Meanwhile, some traders exited from 8400 and 8500 puts on the back of profit booking. Meanwhile, India VIX - the gauge of underlying volatility in the market - has risen in today's session as traders turned cautious ahead of central bank's policy review.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 6.64% and reached 14.57. The 50-share CNX Nifty was up by 73.65 points or 0.86% to settle at 8,659.90.

Nifty April 2015 futures closed at 8689.80 on Monday at a premium of 29.90 points over spot closing of 8659.90, while Nifty May 2015 futures ended at 8738.45 at a premium of 78.55 points over spot closing. Nifty April futures saw a contraction of 0.37 million (mn) units, taking the total outstanding open interest (OI) to 18.60 million (mn) units. The near month derivatives contract will expire on April 30, 2015.

From the most active contracts, State Bank of India April 2015 futures traded at a premium of 1.25 points at 275.35 compared with spot closing of 274.10. The number of contracts traded were 20,366.

ICICI Bank April 2015 futures traded at a premium of 1.35 points at 322.15 compared with spot closing of 320.80. The number of contracts traded were 17,354.

HDFC Bank April 2015 futures traded at a premium of 8.55 points at 1038.65 compared with spot closing of 1030.10. The number of contracts traded were 16,438.

Reliance Industries April 2015 futures traded at a premium of 6.45 points at 830.10 compared with spot closing of 823.65. The number of contracts traded were 17,021.

Axis Bank April 2015 futures traded at a premium of 2.10 points at 570.10 compared with spot closing of 568.00. The number of contracts traded were 22,402.

Among Nifty calls, 8700 SP from the April month expiry was the most active call with an addition of 0.04 million open interests. Among Nifty puts, 8500 SP from the April month expiry was the most active put with an addition of 0.08 million open interests. The maximum OI outstanding for Calls was at 9000 SP (3.38 mn) and that for Puts was at 8,400 SP (4.01 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8693.72 --- Pivot Point 8633.73--- Support --- 8599.92.

The Nifty Put Call Ratio (PCR) finally stood at 1.14 for April month contract. The top five scrips with highest PCR on OI were Mcleod Russel India (1.16), Sun TV (1.11), M&M (1.05), CESC (1.04) and India Cements (1.02). 

Among most active underlying, Housing Development and Infrastructure witnessed an addition of 2.78 million of Open Interest in the April month futures contract, followed by Sun Pharmaceuticals Industries witnessing a contraction of 0.14 million of Open Interest in the April month contract; Aurobindo Pharma witnessed a contraction of 0.04 million of Open Interest in the April month contract, State Bank of India witnessed a contraction of 4.30 million of Open Interest in the April month contract and ICICI Bank witnessed a contraction of 3.21 million of Open Interest in the April month's future contract.