Nifty ekes out slender gains; manages to hold 8,650 level

Buying in last leg of trade helped fifty stock index -- Nifty -- to end the Tuesday’s trade slightly in the green terrain. Huge volatility was witnessed during the trade as investors reacted negatively to Reserve Bank of India’s (RBI) decision to maintain status quo in its first bi-monthly monetary policy statement for 2015-16. Though, recovery witnessed in late hour of trade where the index managed to keep its head above water as sentiments turned positive on report that Reserve Bank has estimated FY16 GDP at 7.8 percent, 30 basis points more than the CSO expectation. Meanwhile, RBI Governor, Raghuram Rajan said there is more room to cut interest rates but will watch out for data, adding that banks over time will be forced to match markets and bring down rates. The governor also said that US Fed’s policy changes will not constrain RBI's move on rates.

Global cues too remained supportive with European counters made a positive start as traders’ mood remained up-beat on positive macro economic data. UK Services PMI jumped to 58.9 in March against 56.7 in February. Asian markets rallied on Tuesday with Shanghai Composite ending at its highest levels since March 2008. Back home, sentiments also remained up-beat on report that foreign institutional investors were net buyers in equities worth Rs 937 crore on Monday, as per provisional stock exchange data. However, gains remained capped on report that domestic ratings agency Crisil said that credit quality improvement will continue to be gradual in FY 2016 as well, but underlined that large companies are a cause of worry. Meanwhile, Finance minister Arun Jaitley clarifying the tax notice sent to foreign investors said that India didn’t aspire to be a tax haven and every tax demand could not be equated with an act of ‘tax terrorism’ by the government. Finally, Nifty ended the marginally in the green holding its crucial 8,650 level.

The top gainers from the F&O segment were UBL, SKS Microfinance and Jindal Steel. On the other hand, the top losers were Rural Electrification Corporation, DLF and Indiabulls Real Estate. In the index options segment, maximum OI continues to be seen in the 8900-9000 calls and 8500-8400 puts indicating the expected trading range. In today's session, the 8700, 8900 and 9000 Call strikes saw addition of 1.16, 3.69 and 3.09 lakh shares, respectively. On the other hand, 8700, 8500 and 8300 Put strikes saw addition of 6.17, 8.21 and 3.85 lakh shares, respectively.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 2.21% and reached 14.25. The 50-share CNX Nifty was up by 0.40 points to settle at 8,660.30.

Nifty April 2015 futures closed at 8711.30 on Tuesday at a premium of 51.00 points over spot closing of 8660.30, while Nifty May 2015 futures ended at 8761.05 at a premium of 100.75 points over spot closing. Nifty April futures saw a contraction of 0.04 million (mn) units, taking the total outstanding open interest (OI) to 18.55 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 1.00 points at 273.00 compared with spot closing of 272.00. The number of contracts traded were 23,435.

ICICI Bank April 2015 futures traded at a premium of 1.60 points at 319.35 compared with spot closing of 317.75. The number of contracts traded were 22,104.

HDFC Bank April 2015 futures traded at a premium of 2.90 points at 1040.15 compared with spot closing of 1037.25. The number of contracts traded were 20,623.

Reliance Industries April 2015 futures traded at a premium of 6.85 points at 839.00 compared with spot closing of 832.15. The number of contracts traded were 22,359.

Axis Bank April 2015 futures traded at a premium of 3.05 points at 562.10 compared with spot closing of 559.05. The number of contracts traded were 36,108.