Nifty ends above crucial 8,100 level on value buying

Making a smart bounce back, Nifty surged with triple digit gains on Wednesday as investors cheered the US index provider MSCI's decision to delay inclusion of Chinese 'A' shares in its emerging market index, thereby boosting the prospects of more foreign fund inflows into the domestic market going ahead. Besides, strength in rupee against the American currency too influenced trading sentiments. On the global front, Asian markets closed mix, though some of the indices have recovered from their initial losses but the Chinese market ended lower after MSCI Inc held off from adding mainland equities to its benchmark indexes. However, European stock markets clawed back some recent losses as Greece tried again to break the deadlock with its international creditors.

Back home, the market made a positive start on value-buying in blue-chips which became attractive after recent losses amid a firm trend in the Asian markets. Thereafter, the index reclaimed its crucial 8,100 mark in later morning session as investor sentiments got buoyed with World Bank report that India has figured in top five emerging economies for highest investment commitments despite a drop in investment commitments of USD 6.2 billion last year. According to a World Bank, the five sectors in which India has still topped are private, infrastructure, energy, transport and water. Though there was some cautiousness ahead of the IIP data slated to be announced later in the week that may show factory output growth sank to a six-month low in April, dragged by sluggish infrastructure activity and weak exports. Market extended its gain in the second half of trade on account of buying in front line counters and taking cues from European counterparts. Sugar stocks were in the most jubilant mood after Cabinet Committee on Economic Affairs (CCEA) approved an interest-free loan package worth Rs 6,000 crore for the debt-laden industry. However, some profit taking emerged in the final hours that dragged the benchmark slightly lower from the high points of the day, still the index ended with notable gains. All the sectoral indices on the NSE settled in the positive territory with CNX IT gaining the most, ending with an addition of over two percent followed by CNX Auto up by 1.89% and CNX Energy up by 1.62% in the trade.

The top gainers from the F&O segment were Motherson Sumi Systems, Cairn India and Hexaware Technologies. On the other hand, the top losers were Kaveri Seed Company, Unitech and IFCI. In the index options segment, maximum OI was being seen in the 8500-8400 calls and 8000-7800 puts. In today's session, while the traders preferred to exit 8400 put, heavy buildup was seen in the 7800 put. On the other hand, traders exited from 8100 Call, while 8400 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 5.17% and reached 17.07. The 50-share CNX Nifty was up by 102.05 points or 1.27% to settle at 8,124.45. Nifty June 2015 futures closed at 8120.05 on Wednesday at a discount of 4.40 points over spot closing of 8,124.45, while Nifty July 2015 futures ended at 8153.75 at a premium of 29.30 points over spot closing. Nifty June futures saw contraction of 0.97 million (mn) units, taking the total outstanding open interest (OI) to 15.40 million (mn) units. The near month derivatives contract will expire on June 25, 2015.

From the most active contracts, State Bank of India June 2015 futures traded at a premium of 0.20 points at 260.85 compared with spot closing of 260.65. The number of contracts traded were 19,470.

ICICI Bank June 2015 futures traded at a premium of 0.05 points at 293.05 compared with spot closing of 293.00. The number of contracts traded were 23,005.

HDFC Bank June 2015 futures traded at a premium of 0.60 points at 1014.60 compared with spot closing of 1014.00. The number of contracts traded were 19,041.

Tata Motors June 2015 futures traded at a premium of 0.90 points at 446.80 compared with spot closing of 445.90. The number of contracts traded were 20,891.

Reliance Industries June 2015 futures traded at a premium of 1.35 points at 907.65 compared with spot closing of 906.30. The number of contracts traded were 25,017.

Among Nifty calls, 8200 SP from the June month expiry was the most active call with an addition of 0.04 million open interests. Among Nifty puts, 8000 SP from the June month expiry was the most active put with an addition of 0.07 million open interests. The maximum OI outstanding for Calls was at 8300 SP (5.10 mn) and that for Puts was at 8,000 SP (5.30 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8176.53 --- Pivot Point 8100.17 --- Support --- 8048.08.

The Nifty Put Call Ratio (PCR) finally stood at 0.82 for June month contract. The top five scrips with highest PCR on OI were UBL (1.49), JSW Steel (1.15), REC (1.07), L&T (1.03) and BHEL (0.98). 

Among most active underlying, State Bank of India witnessed an addition of 0.18 million of Open Interest in the June month futures contract, followed by ICICI Bank witnessing an addition of 0.06 million of Open Interest in the June month contract; Reliance Industries witnessed a contraction of 0.28 million of Open Interest in the June month contract, Infosys witnessed an addition of 0.46 million of Open Interest in the June month contract and Larsen & Toubro witnessed an addition of 0.22 million of Open Interest in the June month's future contract.