Bulls continue to show aggression; Nifty ends above 8300 level

The fifty stock index -- Nifty -- staged a blockbuster performance on the first day of a new week by vehemently rallying over a percentage point in the session and re-conquering its psychological 8300 level on the back of broad-based buying. On the global front, Asian markets closed mostly in green on Monday, following a healthy US jobs report last week, while investor sentiment was also boosted by China's decision to cut interest rates at the weekend for the third time in six months. However, European shares retreated in early trade ahead of more talks on Greece's bailout.

After a positive opening, market started extending its gains on sustained buying witnessed in all key heavyweights along with broader indices. The index reclaimed its crucial 8,250 mark as investor sentiments got buoyed with Finance Minister Arun Jaitley stating that India's economy grew an estimated 7-7.5 percent last fiscal year and will keep growing this year, but the government will have to invest more in agriculture to keep up the momentum. Besides, a firm trend in other Asian markets following China’s move to cut interest rates for the third time in six months and a solid US jobs report too supported the sentiments. Second half of trade brought some more cheer to the market and it touched its intraday highs as investor sentiment got a boost on hopes of a rate cut by Reserve Bank of India as retail inflation is expected to remain below 6% that is within the comfort zone of the central bank. The government's decision to ease its combative stance on MAT demand along, accompanied by a decline in global crude oil prices and the likelihood of a normal monsoon further boosted investor sentiment. Eventually, Nifty finished the session near its intraday high and recaptured its crucial 8,300 mark with a gain of over 130 points supported by index heavyweights viz, Bank of Baroda, SBI, Vedanta and UltraTech Cement.

After suffering significant losses in the previous week, the Indian equities market is expected to remain volatile this weekly as traders will be eyeing next batch of quarterly results, macroeconomic data and developments in Parliament on key reform bills for further cues. The Indian index jumped consecutively for the second day on value buying and short covering after falling nearly 9 percent since April 15, which took Nifty below 8,100 levels.

The top gainers from the F&O segment were Bank of Baroda, Ashok Leyland and Eicher Motors. On the other hand, the top losers were Hindustan Unilever, Just Dial and DLF. In the index options segment, maximum OI continues to be seen in the 8600-8500 calls and 8000-8100 puts indicating the expected trading range. In today's session, the 8300, 8400 and 8500 CALL strikes saw addition of 2.11, 3.15 and 2.13 lakh shares, respectively. On the other hand, 8300, 8200 and 8100 PUT strikes saw an addition of 10.86, 15.20 and 5.67 lakh shares, respectively.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 2.53% and reached 18.62. The 50-share CNX Nifty was up by 133.75 points or 1.63% to settle at 8,325.25. Nifty May 2015 futures closed at 8342.15 on Monday at a premium of 16.90 points over spot closing of 8,325.25, while Nifty June 2015 futures ended at 8372.45 at a premium of 47.20 points over spot closing. Nifty May futures saw contraction of 0.30 million (mn) units, taking the total outstanding open interest (OI) to 13.65 million (mn) units. The near month derivatives contract will expire on May 28, 2015.

From the most active contracts, State Bank of India May 2015 futures traded at a discount of 0.55 points at 274.95 compared with spot closing of 275.50. The number of contracts traded were 37,867.

HDFC Bank May 2015 futures traded at a premium of 1.70 points at 991.80 compared with spot closing of 990.10. The number of contracts traded were 18,898.

Reliance Industries May 2015 futures traded at a premium of 6.65 points at 900.45 compared with spot closing of 893.80. The number of contracts traded were 25,991.

Punjab National Bank May 2015 futures traded at a premium of 0.60 points at 148.60 compared with spot closing of 148.00. The number of contracts traded were 27,208.

Bank of Baroda May 2015 futures traded at a premium of 0.55 points at 170.05 compared with spot closing of 169.50. The number of contracts traded were 70,225. Among Nifty calls, 8300 SP from the May month expiry was the most active call with an addition of 0.31 million open interests. Among Nifty puts, 8200 SP from the May month expiry was the most active put with an addition of 1.52 million open interests. The maximum OI outstanding for Calls was at 8500 SP (4.77 mn) and that for Puts was at 8,000 SP (5.31 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8363.78--- Pivot Point 8294.22--- Support --- 8255.68.

The Nifty Put Call Ratio (PCR) finally stood at 1.12 for May month contract. The top five scrips with highest PCR on OI were Bank of Baroda (1.47), Bajaj-Auto (1.21), Vedanta (1.14), Sun TV (1.06) and Havells (0.98). 

Among most active underlying, Bank of Baroda witnessed an addition of 3.36 million of Open Interest in the May month futures contract, followed by State Bank of India witnessing an addition of 0.78 million of Open Interest in the May month contract; Reliance Industries witnessed an addition of 0.34 million of Open Interest in the May month contract, ICICI Bank witnessed an addition of 0.03 million of Open Interest in the May month contract and Ashok Leyland witnessed an addition of 2.20 million of Open Interest in the May month's future contract.