Nifty makes good start of the week; reclaims 8350 level

The fifty stock index -- Nifty -- showcased yet another courageous performance and went on to outclass indices around the world by vivaciously rallying by over a percentage points in the session and settling above the psychological 8350 level. On the global front, Asian markets closed mostly in green, tracking the gains in US shares as weaker-than-expected economic data spurred bets the Federal Reserve won’t rush to raise interest rates. Further, European shares rose on Monday, with energy stocks in focus after a rise in oil prices, while the dollar lifted off four-month lows it had reached on concern over the US economy.

Back home, the market made a positive start on sustained buying activities by both funds and retail investors thanks to positive global cues. The index reclaimed its crucial 8, 300 mark as investor sentiments got buoyed by some positive news from the monsoon front with a forecast of a timely monsoon and Finance Minister Arun Jaitley’s statement that making taxation more reasonable and improving ease of doing business will be among his top priorities going ahead. Some support also came in with the Associated Chambers of Commerce and Industry of India (Assocham) awarding the Narendra Modi government seven marks on a scale of 10 for its performance over the past year. 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 given the sustained fall in both the benchmark measures of inflation cooling to a four-month low in April along with a deceleration in capital outflows. Eventually, Nifty finished the session near its intraday high with a gain of over 110 points supported by index heavyweights viz, Zee Entertainment, Dr. Reddy's Laboratories and GAIL.

The top gainers from the F&O segment were Jain Irrigation Systems, Apollo Tyres and Sun TV Network. On the other hand, the top losers were Asian Paints, Jaiprakash Power Ventures and Allahabad Bank. 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, 8200 and 8100 Puts strikes saw addition of 12.71, 15.05 and 5.76 lakh shares, respectively. On the other hand, some traders exited from 8300, 8400 and 8500 Call on the back of profit booking.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 9.65% and reached 17.90. The 50-share CNX Nifty was up by 111.30 points or 1.35% to settle at 8,373.65.

Nifty May 2015 futures closed at 8372.80 on Monday at a discount of 0.85 points over spot closing of 8,373.65, while Nifty June 2015 futures ended at 8,399.30 at a premium of 25.65 points over spot closing. Nifty May futures saw contraction of 0.38 million (mn) units, taking the total outstanding open interest (OI) to 13.62 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 3.40 points at 286.25 compared with spot closing of 289.65. The number of contracts traded were 20,464.

HDFC Bank May 2015 futures traded at a premium of 3.20 points at 1010.35 compared with spot closing of 1007.15. The number of contracts traded were 16,125.

Reliance Industries May 2015 futures traded at a premium of 0.55 points at 892.05 compared with spot closing of 891.50. The number of contracts traded were 21,606.

Axis Bank May 2015 futures traded at a premium of 1.35 points at 569.35 compared with spot closing of 568.00. The number of contracts traded were 16,991.

HDIL May 2015 futures traded at a premium of 0.65 points at 105.55 compared with spot closing of 104.90. The number of contracts traded were 16,383.

Among Nifty calls, 8400 SP from the May month expiry was the most active call with a contraction of 0.60 million open interests. Among Nifty puts, 8200 SP from the May month expiry was the most active put with an addition of 1.50 million open interests. The maximum OI outstanding for Calls was at 8500 SP (4.69 mn) and that for Puts was at 8,100 SP (5.33 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8414.85 --- Pivot Point 8343.40 --- Support --- 8302.20.

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 Eicher Motors (2.01), Dr. Reddy's Laboratories (1.51), Hero MotoCorp (1.45), Adani Enterprises (1.45) and Union Bank of India (1.44). 

Among most active underlying, Asian Paints witnessed an addition of 0.66 million of Open Interest in the May month futures contract, followed by State Bank of India witnessing an addition of 1.57 million of Open Interest in the May month contract; Reliance Industries witnessed a contraction of 1.28 million of Open Interest in the May month contract, ICICI Bank witnessed an addition of 0.15 million of Open Interest in the May month contract and Adani Enterprises witnessed an addition of 0.37 million of Open Interest in the May month's future contract.