Nifty gains after previous session’s consolidation; ends above 8,450 mark

After witnessing consolidation in previous session, domestic index Nifty heaved a sigh of relief garnering a gain in Friday’s trade on account of across-the-board buying by participants amid renewed hopes of a rate cut and better-than-estimated corporate earnings. On global front, Asian markets closed mostly in green, on hopes that the latest disappointing Chinese economic data will spur the country’s leaders to announce further stimulus measures. Further, Bank of Japan maintained its massive stimulus programme and offered a slightly more upbeat view of the world's third-largest economy, as a modest rebound in consumption helped service-sector sentiment improve to a one-year high.  However, European stock markets moved slightly lower on Friday, with investors keeping a close eye on negotiations between Greece and its lenders as well as the latest confidence data from Germany.

Back home, the Indian equity benchmark Nifty opened on an optimistic note and traded in a 70-point range and remained positive through the session on the back of sustained buying activities by both funds and retail investors thanks to positive global cues. Sentiments remained optimistic with the government’s decision to liberalise foreign direct investment norms for NRIs and overseas citizens of India (OCI) as it aims to increase capital flows into the country.  Some support also came after Finance Minister Arun Jaitley outlined and defended the various steps and policy decisions taken by the Narendra Modi-led NDA government in its first year in office. He added that the previous environment of gloom had been replaced by a climate of enthusiasm and the newfound zeal makes people restless with even a growth rate of 8%. However, some investors remained cautious on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 186.26 crore on May 21, 2015. Meanwhile, in absence of any major cues, the market remained range-bound in second half of the session. Traders were seen piling position in Capital Goods, PSU and FMCG stocks while selling was witnessed in Realty, Consumer Durables and Auto sectors stocks. Eventually, Nifty ended the session above its crucial 8,450 mark with a gain of about half a percent.

The top gainers from the F&O segment were Voltas, Karnataka Bank and MindTree. On the other hand, the top losers were CESC, JSW Energy and Mcleod Russel India. In the index options segment, maximum OI is being seen in the 8500-8600 calls and 8000-8200 puts. In today's session, while the traders preferred to exit 8200 put, heavy buildup was seen in the 8400 put. On the other hand, traders exited from 8300 Call, while 8500 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 2.67% and reached 16.94. The 50-share CNX Nifty was up by 37.95 points or 0.45% to settle at 8,458.95. Nifty May 2015 futures closed at 8452.05 on Friday at a discount of 6.90 points over spot closing of 8,458.95, while Nifty June 2015 futures ended at 8,476.50 at a premium of 17.55 points over spot closing. Nifty May futures saw contraction of 0.27 million (mn) units, taking the total outstanding open interest (OI) to 12.86 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 2.45 points at 279.45 compared with spot closing of 281.90. The number of contracts traded were 166,606.

ITC May 2015 futures traded at a premium of 0.10 points at 328.10 compared with spot closing of 328.00. The number of contracts traded were 19,378.

HDFC Bank May 2015 futures traded at a discount of 1.45 points at 1022.55 compared with spot closing of 1024.00. The number of contracts traded were 26,928.

Axis Bank May 2015 futures traded at a premium of 1.10 points at 568.10 compared with spot closing of 567.00. The number of contracts traded were 31,950.

Sun Pharmaceuticals May 2015 futures traded at a premium of 1.35 points at 1001.35 compared with spot closing of 1000.00. The number of contracts traded were 34,832.

Among Nifty calls, 8500 SP from the May month expiry was the most active call with a contraction of 0.06 million open interests. Among Nifty puts, 8400 SP from the May month expiry was the most active put with an addition of 1.67 million open interests. The maximum OI outstanding for Calls was at 8500 SP (4.98 mn) and that for Puts was at 8,300 SP (5.71 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8492.13--- Pivot Point 8456.37--- Support --- 8423.18.

The Nifty Put Call Ratio (PCR) finally stood at 1.26 for May month contract. The top five scrips with highest PCR on OI were Bajaj-Auto (2.96), Voltas (1.79), Dr. Reddy's Laboratories (1.77), Adani Enterprises (1.68) and Eicher Motors (1.46). 

Among most active underlying, State Bank of India witnessed an addition of 9.24 million of Open Interest in the May month futures contract, followed by ITC witnessing an addition of 0.21 million of Open Interest in the May month contract; Sun Pharmaceuticals Industries witnessed a contraction of 1.64 million of Open Interest in the May month contract, Voltas witnessed an addition of 1.82 million of Open Interest in the May month contract and Axis Bank witnessed a contraction of 1.82 million of Open Interest in the May month's future contract.