Nifty snaps four days losing Streak; ends above 8400 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. Fresh positions built up by traders, following the beginning of June series in the derivatives segment and value-based buying in select counters helped the index to settle above its psychological 8400 level. On the global front, Asian markets closed mostly in red as the region showed lackluster movements ahead of a batch of US economic data due out later in the night that could provide fresh hints on the timing of a possible interest-rate hike by the Federal Reserve. Further, European markets are retreating on Friday, remaining on course for a weekly loss, as mixed messages about Greece's debt talks added fuel to investor anxiety.

Back home, the market made a positive start as investors opted to buy beaten down but fundamental strong stocks. Besides, a better trend in other Asian markets coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. The index reclaimed its crucial 8,350 mark in later morning session as investor sentiments got buoyed with report that the government reducing paperwork for foreign investors by allowing them to freely transfer stakes in companies operating in sectors where investments are allowed under the automatic route without seeking its prior approval. This is aimed at improving ease of doing business and attracting foreign direct investment (FDI) into the country. Second half of trade brought some more cheer to the market and it touched its intraday highs as investors built up fresh long-positions on expectations that the Reserve Bank of India (RBI) would slash the repo rate, at which it lends to banks, in its credit policy on Tuesday. Notably, sentiment also remained positive ahead of the release of Q1FY15 GDP data which is scheduled to be unveiled later in the day. Interest rate sensitives stocks like banking and auto stocks led from the front followed by the FMCG, Pharma and capital goods stocks.  Eventually, Nifty finished the session near its intraday high and recaptured its crucial 8,400 mark with a gain of over 114 points supported by index heavyweights viz, Mahindra & Mahindra, Grasim Industries and BPCL.

The top gainers from the F&O segment were SRF, Ajanta Pharma and Bharat Electronics. On the other hand, the top losers were Britannia Industries, Adani Enterprises and Bajaj Finance. In the index options segment, maximum OI is being seen in the 8800-8700 calls and 8000-8100 puts. In today's session, the 8600, 8700 and 8800 Call strikes saw addition of 2.53, 6.65 and 5.69 lakh shares, respectively. On the other hand, 8400, 8300 and 8200 Put strikes saw an addition of 4.46, 6.54 and 5.29 lakh shares, respectively.  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 2.77% and reached 16.65. The 50-share CNX Nifty was up by 114.65 points or 1.38% to settle at 8,433.65.  Nifty June 2015 futures closed at 8458.65 on Friday at a premium of 25.00 points over spot closing of 8,433.65, while Nifty July 2015 futures ended at 8492.65 at a premium of 59.00 points over spot closing. Nifty June futures saw an addition of 2.87 million (mn) units, taking the total outstanding open interest (OI) to 15.85 million (mn) units. The near month derivatives contract will expire on June 25, 2015.

From the most active contracts, Reliance Industries June 2015 futures traded at a premium of 3.00 points at 883.85 compared with spot closing of 880.85. The number of contracts traded were 30,351.

Sun Pharmaceuticals Industries June 2015 futures traded at a premium of 3.60 points at 972.90 compared with spot closing of 969.30. The number of contracts traded were 28,874.

Bharti Airtel June 2015 futures traded at a premium of 12.10 points at 425.20 compared with spot closing of 413.10. The number of contracts traded were 62,045.

Aurobindo Pharma June 2015 futures traded at a premium of 11.70 points at 1383.50 compared with spot closing of 1371.80. The number of contracts traded were 31,992.

UPL June 2015 futures traded at a premium of 16.35 points at 549.90 compared with spot closing of 533.55. The number of contracts traded were 38,646.

Among Nifty calls, 8500 SP from the June month expiry was the most active call with an addition of 0.06 million open interests. Among Nifty puts, 8300 SP from the June month expiry was the most active put with an addition of 0.65 million open interests. The maximum OI outstanding for Calls was at 8800 SP (3.51 mn) and that for Puts was at 8,000 SP (4.13 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8483.13--- Pivot Point 8394.42--- Support --- 8344.93.

The Nifty Put Call Ratio (PCR) finally stood at 1.15 for June month contract. The top five scrips with highest PCR on OI were REC (1.68), BHEL (1.65), MindTree (1.36), Bajaj-Auto (1.35) and M&M (1.24). 

Among most active underlying, Lupin witnessed an addition of 2.03 million of Open Interest in the June month futures contract, followed by Bharti Airtel witnessing an addition of 7.48 million of Open Interest in the June month contract; Aurobindo Pharma witnessed an addition of 0.28 million of Open Interest in the June month contract, Adani Enterprises witnessed an addition of 0.37 million of Open Interest in the June month contract and State Bank of India witnessed an addition of 4.15 million of Open Interest in the June month's future contract.