Nifty reclaims crucial 8,700 level

The benchmark Nifty rose on Wednesday, marking its highest close in three weeks, led by index heavyweight Reliance Industries and IT majors while Coal India gained the most after the coal ministry allowed the company to revert to the old system, removing the cap on e-auction volumes with effect from April 2015. On the global front, Asian stocks settled mixed, tracking weak cues overnight from Wall Street while higher iron ore and crude oil prices boosted resource stocks. Meanwhile, European stocks climbed to a 15-year high, buoyed by a sharp rise in oil and gas shares as investors bet Royal Dutch Shell's deal to buy BG Group will spark a wave of mergers in the industry.

Back home, the Indian equity benchmark Nifty opened on a positive note and traded in a 50-point range and remained mostly in green on sustained buying activities by both funds and retail investors thanks to positive global cues. Sentiments remained optimistic with a survey sponsored by RBI projecting the economic growth rate at 7.9 percent for the current fiscal, up from 7.5 percent in 2014-15. Also, NITI Aayog vice-chairman Arvind Panagariya has said that nothing has-changed-on the-ground though the economy is showing signs of turnaround. Panagariya also said that it will take some time before major results show up as there is a new government which came with a lot of promises. Market extended its gain in early afternoon session and recaptured its psychological 8,700 level on account of buying in information technology (IT), Metal, Oil & Gas and FMCG stocks. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 144 crore on April 07, 2015. Further, in absence of any major cues, the market remained range-bound in second half of the session. Traders remained cautious ahead of the fourth quarterly corporate result session. Finally, Nifty ended the session above its crucial 8,700 mark with a gain of over half a percent.

The top gainers from the F&O segment were Amtek Auto, Coal India and Hindustan Petroleum Corporation. On the other hand, the top losers were Sun TV Network, Aurobindo Pharma and Havells India. 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 9000, 9100 and 9200 Call strikes saw addition of 5.77, 1.06 and 1.93 lakh shares, respectively. On the other hand, 8700, 8600 and 8500 Put strikes saw addition of 10.55, 6.58 and 5.57 lakh shares, respectively.

Most of the sectoral indices on the NSE settled in the positive territory with CNX IT gaining the most, ending with a gain of 1.88 present followed CNX Metal down by 1.64 present and CNX FMCG down by 1.5 present, while CNX Finance up by 0.56% and Bank Nifty up by 0.29 present remained the gainers on NSE sectoral space.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 0.68% and reached 14.34. The 50-share CNX Nifty was up by 54.10 points or 0.62% to settle at 8,714.40. Nifty April 2015 futures closed at 8762.65 on Wednesday at a premium of 48.25 points over spot closing of 8714.40, while Nifty May 2015 futures ended at 8808.75 at a premium of 94.35 points over spot closing. Nifty April futures saw an addition of 0.61 million (mn) units, taking the total outstanding open interest (OI) to 19.17 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 0.85 points at 274.30 compared with spot closing of 273.45. The number of contracts traded were 21,259.

ICICI Bank April 2015 futures traded at a premium of 1.70 points at 317.25 compared with spot closing of 315.55. The number of contracts traded were 15,356.

HDFC Bank April 2015 futures traded at a premium of 6.30 points at 1042.30 compared with spot closing of 1036.00. The number of contracts traded were 16,570.

Reliance Industries April 2015 futures traded at a premium of 7.00 points at 870.00 compared with spot closing of 863.00. The number of contracts traded were 39,405.

Axis Bank April 2015 futures traded at a premium of 2.20 points at 558.20 compared with spot closing of 556.00. The number of contracts traded were 26,713.

Among Nifty calls, 8800 SP from the April month expiry was the most active call with an addition of 0.31 million open interests. Among Nifty puts, 8700 SP from the April month expiry was the most active put with an addition of 1.05 million open interests. The maximum OI outstanding for Calls was at 9000 SP (4.26 mn) and that for Puts was at 8,400 SP (4.09 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8736.67--- Pivot Point 8708.23--- Support --- 8685.97.

The Nifty Put Call Ratio (PCR) finally stood at 1.25 for April month contract. The top five scrips with highest PCR on OI were Mindtree (1.85), UBL (1.34), M&M (1.23), Bharti Airtel (1.13) and BPCL (1.13). 

Among most active underlying, Rural Electrification Corporation witnessed an addition of 1.53 million of Open Interest in the April month futures contract, followed by Aurobindo Pharma witnessing a contraction of 0.11 million of Open Interest in the April month contract; Reliance Industries witnessed a contraction of 1.01 million of Open Interest in the April month contract, HDIL witnessed an addition of 0.58 million of Open Interest in the April month contract and Axis Bank witnessed an addition of 0.56 million of Open Interest in the April month's future contract.