Nifty makes triple digit gains; closes above 8300 level

Making a smart bounce back, Nifty surged with triple digit gains on Monday, as the benchmark, after a positive start continued its strong momentum till the end of the session. Fresh positions built up by traders, following the beginning of May series in the derivatives segment and value-based buying in select counters helped the index to post its biggest daily gain in more than two months. On the global front, Asian markets closed mostly in green on hopes of further stimulus from Chinese authorities after Chinese factory data showed further signs of weakness in the economy. Further, European shares rose in early trade, led higher by Germany after upbeat factory activity, while the dollar steadied following signs that the US economy may be emerging from a recent soft patch.

Back home, the market made a positive start on the back of aggressive short covering led by a strong rally in the auto stocks owing to higher number of export sales and new launch.  The index reclaimed its crucial 8,250 mark in later morning session as investor sentiments got buoyed after the government clarified that tax liability on foreign investors on account of MAT on capital gains could be much lower than Rs 40,000 crore estimated earlier. Value-buying by funds in select bluechip stocks after recent losses amid a firming trend in other Asian markets, following weekend gains in US markets, buoyed trading sentiments at the market. Sentiments also got a boost with the report that French companies are looking at 10% growth in their investments in India amidst growing ties between both the nations and Prime Minister Narendra Modi's recent visit to France. Market extended its gain in the second half of trade and recaptured its psychological 8,300 level on account of buying in front line counters and taking cues from European counterparts. The optimism on the street continued despite weak Indian manufacturing data which recorded a growth slowdown during April on account of weaker pace of total new orders. Meanwhile, gains in ONGC on reports stating that the government may scrap the fuel subsidy-sharing mechanism and bear the entire burden of the oil marketing companies for 2015-16 has contributed to the surge. Eventually, Nifty finished the session near its intraday high and above its crucial 8,300 mark with a gain of over 150 points.

The top gainers from the F&O segment were Aditya Birla Nuvo, Wockhardt and Adani Ports and Special Economic Zone. On the other hand, the top losers were Shriram Transport Finance Company, Exide Industries and Mcleod Russel India. In the index options segment, maximum OI continues to be seen in the 8600-8500 calls and 8200-8100 puts indicating the expected trading range. In today's session, the 8400, 8500 and 8600 CALL strikes saw addition of 9.14, 2.77 and 10.02 lakh shares, respectively. On the other hand, 8200, 8100 and 8000 PUT strikes saw an addition of 7.24, 5.95 and 7.43 lakh shares, respectively.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 0.48% and reached 17.30. The 50-share CNX Nifty was up by 150.45 points or 1.84% to settle at 8,331.95. Nifty May 2015 futures closed at 8372.25 on Monday at a premium of 40.30 points over spot closing of 8,331.95, while Nifty June 2015 futures ended at 8404.85 at a premium of 72.90 points over spot closing. Nifty May futures saw contraction of 0.58 million (mn) units, taking the total outstanding open interest (OI) to 18.33 million (mn) units. The near month derivatives contract will expire on May 28, 2015.

From the most active contracts, Reliance Industries May 2015 futures traded at a discount of 7.35 points at 885.40 compared with spot closing of 892.75. The number of contracts traded were 30,361.

Axis Bank May 2015 futures traded at a premium of 3.25 points at 571.25 compared with spot closing of 568.00. The number of contracts traded were 23,813.

ONGC May 2015 futures traded at a discount of 0.15 points at 329.55 compared with spot closing of 329.70. The number of contracts traded were 25,286.

Sun Pharmaceutical Industries May 2015 futures traded at a premium of 8.85 points at 955.45 compared with spot closing of 946.60. The number of contracts traded were 24,466.

Yes Bank May 2015 futures traded at a premium of 2.30 points at 855.30 compared with spot closing of 853.00. The number of contracts traded were 21,227.

Among Nifty calls, 8400 SP from the May month expiry was the most active call with an addition of 0.91 million open interests. Among Nifty puts, 8200 SP from the May month expiry was the most active put with an addition of 0.72 million open interests. The maximum OI outstanding for Calls was at 8600 SP (3.63 mn) and that for Puts was at 8,100 SP (3.53 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8378.48 --- Pivot Point 8299.47 --- Support --- 8252.93.

The Nifty Put Call Ratio (PCR) finally stood at 1.05 for May month contract. The top five scrips with highest PCR on OI were Rural Electrification Corporation (1.96), Petronet LNG (1.25), Dabur (1.22), India Cements (1.20) and Siemens (1.19). 

Among most active underlying, Reliance Industries witnessed a contraction of 1.28 million of Open Interest in the May month futures contract, followed by ICICI Bank witnessing an addition of 0.50 million of Open Interest in the May month contract; Wockhardt witnessed an addition of 0.18 million of Open Interest in the May month contract, Axis Bank witnessed an addition of 0.05 million of Open Interest in the May month contract and Infosys witnessed a contraction of 0.44 million of Open Interest in the May month's future contract.