Nifty snaps three days losing streak; regains 8,150 mark

Making a smart bounce back, Nifty surged with triple digit gains on Friday, as the benchmark, after a positive start continued its strong momentum till the end of the session. Sentiments remained optimistic with Finance Minister Arun Jaitley's announcement of a high level committee, which will give its first recommendations on the issue of imposition of MAT on foreign investors. Besides, recovery in rupee against the dollar and a firming trend in global markets too boosted sentiments. On the global front, Asian markets closed mostly in green on hopes for easier monetary policies after a slew of central bank reviews. Further, European shares rose in early trade, as the Conservative Party looked set to take power after the U.K. election.

Back home, the Indian equity benchmark made a positive start buoyed by a firm trend in other Asian markets. Some support also came with report that India is projected to achieve highest annual GDP growth rate of 7.9 percent over next 8 years, overtaking its South Asian economic rival China. The Center for International Development (CID) at Harvard University in its report said after decades spent trailing the growth of its northern neighbor and economic rival, India now tops the projections of annual growth rates to 2023.  Sentiments were also bolstered after Moody’s said India's credit rating was unlikely to be impacted by the recently strong foreign investor sales of shares and bonds over concerns about a tax on overseas funds, despite the uncertainty being created over the country's tax regime. Market extended its gain in the second half of trade and recaptured its psychological 8,200 level on account of buying in front line counters and taking cues from European counterparts. Also, there is some encouragement with the government’s decision to extend the Lok Sabha session by another three days, which would otherwise have ended today. The government is keen to introduce the land acquisition bill and other crucial bills in the Lok Sabha that are key to its reform agenda.  Eventually, Nifty finished the session near its intraday high and above its crucial 8,150 mark with a gain of over 130 points.

The top gainers from the F&O segment were Housing Development and Infrastructure, Amtek Auto and Eicher Motors. On the other hand, the top losers were Punjab National Bank, Bank of Baroda and Titan Company. 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. Meanwhile, India VIX - the gauge of underlying volatility in the market - has declined in today's session, which indicates that traders have slowdown buying options contracts. 

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 2.75% and reached 19.11. The 50-share CNX Nifty was up by 134.20 points or 1.67% to settle at 8,191.50. Nifty May 2015 futures closed at 8210.55 on Friday at a premium of 19.05 points over spot closing of 8,191.50, while Nifty June 2015 futures ended at 8240.25 at a premium of 48.75 points over spot closing. Nifty May futures saw contraction of 1.26 million (mn) units, taking the total outstanding open interest (OI) to 13.96 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 0.75 points at 261.65 compared with spot closing of 262.40. The number of contracts traded were 24,716.

HDFC Bank May 2015 futures traded at a premium of 5.25 points at 983.60 compared with spot closing of 978.35. The number of contracts traded were 34,952.

ICICI Bank May 2015 futures traded at a premium of 0.95 points at 317.85 compared with spot closing of 316.90. The number of contracts traded were 23,807.

Reliance Industries May 2015 futures traded at a premium of 4.80 points at 893.05 compared with spot closing of 888.25. The number of contracts traded were 31,691.

Punjab National Bank May 2015 futures traded at a discount of 2.55 points at 144.05 compared with spot closing of 146.60. The number of contracts traded were 51,979.Among Nifty calls, 8300 SP from the May month expiry was the most active call with an addition of 0.13 million open interests. Among Nifty puts, 8000 SP from the May month expiry was the most active put with an addition of 0.38 million open interests. The maximum OI outstanding for Calls was at 8500 SP (4.22 mn) and that for Puts was at 8,000 SP (4.38 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8236.48--- Pivot Point 8179.97--- Support --- 8134.98.

The Nifty Put Call Ratio (PCR) finally stood at 1 for May month contract. The top five scrips with highest PCR on OI were Bajaj-Auto (1.07), Sun TV (0.99), ACC (0.91), Rural Electrification Corporation (0.90) and Allahabad Bank (0.87). 

Among most active underlying, Hindustan Unilever witnessed an addition of 0.62 million of Open Interest in the May month futures contract, followed by Punjab National Bank witnessing an addition of 6.11 million of Open Interest in the May month contract; ICICI Bank witnessed a contraction of 3.94 million of Open Interest in the May month contract, Reliance Industries witnessed a contraction of 2.07 million of Open Interest in the May month contract and State Bank of India witnessed a contraction of 0.81 million of Open Interest in the May month's future contract.