Bulls continue to show aggression; Nifty ends above 8350 level

CNX Nifty continued its bull run for seventh straight session and finished the terrific day of trade with a gain of about two percent reclaiming its crucial 8,350 level as rate sensitive stocks advanced on hopes that improvement in monsoon may lead to an earlier-than-expected rate cut by the central bank. On the global front, the Asian markets ended mostly in green as Greece presented a new plan to stave off default before an emergency summit in Brussels that could decide the nation’s future in the euro zone. Later the European stocks too rose for a third day after Greek Prime Minister Alexis Tsipras presented a new plan of reforms.

Back home, after getting a gap-up start, benchmark equity index continued its north-ward journey in late morning session supported by firm global cues after Greece gave its creditors new proposals on reforming bailout, fuelling hopes of averting a default and possible exit from the euro zone.  The sentiments also got some support with Finance Minister Arun Jaitley’s statement on the basis of policy changes along with a good monsoon that the path to 10 percent growth in Indian economy is not impossible. Appreciation in Indian rupee too aided the sentiments, the rupee strengthened by six paise to a fresh one-month high of 63.49 against the dollar in early trade, extending its rising streak for the fourth straight day on persistent selling of American currency. In the afternoon trade, the benchmark reclaimed its crucial 8,350 mark supported by firm start in European counterparts. Some support also came with report of surge in FDI in the month of April and statement of Department of Industrial Policy and Promotion (DIPP) secretary Amitabh Kant that he is confident that the country will receive record capital flows in the current fiscal owing to the slew of measures being undertaken by the government to make India an easier place to do business. The index continued its jubilant run till end as investors snapped up risky assets on optimism that Greece and its international creditors will strike a last-minute deal that will see Athens avert default. Finally, Nifty finished the day’s trade above its crucial 8,350 mark with a gain of over 128.15 points supported by index heavyweights viz., PNB, Axis Bank, ICICI Bank and Infosys.

The top gainers from the F&O segment were Indiabulls Real Estate, Jaiprakash Power Ventures and GMR Infrastructure. On the other hand, the top losers were Bharti Airtel, Lupin and Reliance Industries. In the index options segment, maximum OI was being seen in the 8500-8300 calls and 8100-8300 puts. In today's session, while the traders preferred to exit 8000 put, heavy buildup was seen in the 8300 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 increased by 2.67% and reached 15.48. The 50-share CNX Nifty was up by 128.15 points or 1.56% to settle at 8,353.10. Nifty June 2015 futures closed at 8353.15 on Monday at a premium of 0.05 points over spot closing of 8,353.10, while Nifty July 2015 futures ended at 8375.6 at a premium of 22.50 points over spot closing. Nifty June futures saw contraction of 2.08 million (mn) units, taking the total outstanding open interest (OI) to 12.93 million (mn) units. The near month derivatives contract will expire on June 25, 2015.

From the most active contracts, HDFC Bank June 2015 futures traded at a discount of 0.05 points at 1046.6 compared with spot closing of 1,046.65. The number of contracts traded were 45,185.

Reliance Industries June 2015 futures traded at a discount of 0.05 points at 992.6 compared with spot closing of 992.65. The number of contracts traded were 68,968.

State Bank of India June 2015 futures traded at a discount of 0.50 points at 266 compared with spot closing of 266.50. The number of contracts traded were 34,430.

ICICI Bank June 2015 futures traded at a discount of 0.55 points at 314.7 compared with spot closing of 315.25. The number of contracts traded were 27,469.

Axis Bank June 2015 futures traded at a premium of 0.15 points at 572.15 compared with spot closing of 572.00. The number of contracts traded were 35,356.

Among Nifty calls, 8400 SP from the June month expiry was the most active call with an addition of 0.29 million open interests.  Among Nifty puts, 8200 SP from the June month expiry was the most active put with an addition of 0.80 million open interests.  The maximum OI outstanding for Calls was at 8500 SP (5.76 mn) and that for Puts was at 8000 SP (5.97 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8395.90--- Pivot Point 8326.65--- Support --- 8283.85.

The Nifty Put Call Ratio (PCR) finally stood at 1.20 for June month contract.  The top five scrips with highest PCR on OI were JSW Steel (1.58), Maruti Suzuki (1.54), Bajaj-Auto (1.46), Eicher Motors (1.24) and United Breweries (1.19). 

Among most active underlying, Reliance Industries witnessed a contraction of 6.95 million of Open Interest in the June month futures contract, followed by State Bank of India witnessing a contraction of 8.71 million of Open Interest in the June month contract; HDFC Bank witnessed a contraction of 5.22 million of Open Interest in the June month contract, ICICI Bank witnessed a contraction of 6.16 million of Open Interest in the June month contract and Axis Bank witnessed a contraction of 2.86 units of Open Interest in the June month's future contract.