Nifty ends above crucial 8000 level on value buying

The fifty stock index -- Nifty -- continued its northward journey for third consecutive day on Tuesday and finished the choppy day of trade with a gain of 33 points or 0.42%, as investors resort to buying stocks at attractive valuations amid short covering. Besides, a smart rally in the banking stocks have lifted the index higher on reports that the government will infuse fresh capital in the government-run banks this year to bolster risk buffers and credit growth. On the global front, Asian markets were mostly trading in red tracking a sell-off in global equities, as Greece struggles to find a debt reform compromise with its creditors, fuelling fears of a default and exit from the eurozone. Further, the European markets too extended their weakness for the third straight session, with major indices poised for a four-month low, after weekend talks between Greece and its creditors ended in acrimony.

Back home, after getting a cautious start, CNX Nifty continues to trade below its neutral line for most part of the day's trade, however some value buying followed by short covering in last hour of trade help the index to recover its losses and end the session with gain of 33 points. Sentiments got a boost with report that India's trade deficit narrowing to a three months low in May bolstered the outlook for country’s current account balance. Besides, good rainfall has so far been recorded over southern peninsula, central India and east and northeast India this summer with over 13 per cent above the normal limit, also supported the upside. However, market participants remained cautious as the services sector, which contributes about 60 percent to country's gross domestic product, has witnessed a decline of 4.5 percent in its export to $ 13.01 billion in April 2015 as compared to $13.63 billion during April 2014. Further, some investors remained on the sidelines and refrained from any buying activity ahead of  a two-day policy meeting of the U.S. Federal Reserve's monetary committee starting later in the day. Traders were seen piling position in Consumer Durables, Auto and Banking stocks while selling was witnessed in Oil & Gas and FMCG stocks.

The top gainers from the F&O segment were Century Textiles & Industries, Glenmark Pharmaceuticals and India Cements. On the other hand, the top losers were Idea Cellular, Adani Enterprises and Cairn India. 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 7900 put, heavy buildup was seen in the 8000 put. On the other hand, traders exited from 8000 Call, while 8200 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 2.04% and reached 17.16. The 50-share CNX Nifty was up by 33.40 points or 0.42% to settle at 8,047.30. Nifty June 2015 futures closed at 8047.00 on Tuesday at a discount of 0.30 points over spot closing of 8,047.30, while Nifty July 2015 futures ended at 8,076.25 at a premium of 28.95 points over spot closing. Nifty June futures saw contraction of 0.34 million (mn) units, taking the total outstanding open interest (OI) to 15.54 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 discount of 0.05 points at 255.30 compared with spot closing of 255.35. The number of contracts traded were 19,544.

ICICI Bank June 2015 futures traded at a discount of 0.55 points at 302.05 compared with spot closing of 302.60. The number of contracts traded were 17,624.

HDFC Bank June 2015 futures traded at a discount of 1.55 points at 1006.50 compared with spot closing of 1008.05. The number of contracts traded were 15,613.

Reliance Industries June 2015 futures traded at a premium of 0.05 points at 904.55 compared with spot closing of 904.50. The number of contracts traded were 18,905.

Tata Motors June 2015 futures traded at a premium of 0.40 points at 433.40 compared with spot closing of 433.00. The number of contracts traded were 20,219.

Among Nifty calls, 8100 SP from the June month expiry was the most active call with a contraction of 0.03 million open interests. Among Nifty puts, 7900 SP from the June month expiry was the most active put with a contraction of 0.22 million open interests. The maximum OI outstanding for Calls was at 8500 SP (4.79 mn) and that for Puts was at 7,800 SP (4.74 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8088.65 --- Pivot Point 8020.50--- Support --- 7979.15.

The Nifty Put Call Ratio (PCR) finally stood at 0.85 for June month contract. The top five scrips with highest PCR on OI were Bajaj Auto (1.35), UBL (1.27), ZEEL (1.12), Maruti Suzuki (1.09) and Havells (1.03). 

Among most active underlying, State Bank of India witnessed a contraction of 1.87 million of Open Interest in the June month futures contract, followed by ICICI Bank witnessing a contraction of 1.34 million of Open Interest in the June month contract; BPCL witnessed an addition of 0.11 million of Open Interest in the June month contract, Reliance Industries witnessed an addition of 0.06 million of Open Interest in the June month contract and Century Textiles & Industries witnessed an addition of 0.18 million of Open Interest in the June month's future contract.