Nifty logs longest winning streak in five months

The fifty stock index -- Nifty -- extended its gains for the eighth straight session on Tuesday, its longest winning streak in nearly five months, on renewed optimism over Greek debt talks, while good start to monsoon too raised hopes of an ease in the monetary policy by the Reserve Bank of India. On the global front, Asian stocks ended mostly higher, with Chinese markets witnessing a turnaround rally of over two percent after China’s factory activity showed signs of stabilisation in June. Further, European shares extended the previous session’s sharp rally and climbed to a three-week high, with growing expectations that Greece was getting closer to strike a deal with its international creditors.

Back home, after getting a positive start, nifty showed some strength in early morning trades however, it failed to breach the narrow 60-point range for most part of the day, ending the session above its crucial 8,350 mark with gain of over three tens of a percent. The sentiments got a boost with the Finance Minister Arun Jaitley’s statement that the credibility of Indian economy has been partly restored and the momentum must be sustained over the next two years to win over and provide comfort to world investors. Besides, fresh capital inflows by foreign funds at the domestic bourses and a firming trend in global markets on hopes of a Greek bailout deal too boosted the sentiment. Furthermore, concerns of a likely spike in food prices eased due to above-average rains during the initial part of the June-September southwest monsoon rains. For the country as a whole, the cumulative rainfall during this year's monsoon season was 16% above the Long Period Average (LPA) until June 21, 2015. However, there was some cautiousness with global rating agency Fitch raising concern that though government's reform initiatives have unlocked Indian “economy's dynamism” but weak public finances continue to remain a strain on any rating upgrade. Traders were seen piling up position in Metal, Capital Goods and PSU stocks, while selling was witnessed in IT, TECK and Consumer Durables stocks.

Markets may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month June 2015 series to July 2015 series. The near month June 2015 derivatives contracts expire on June 25, 2015.  The top gainers from the F&O segment were Adani Power, Union Bank of India and JSW Energy. On the other hand, the top losers were Jaiprakash Associates, Sun TV Network and Titan Company. 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 8100 put, heavy buildup was seen in the 8300 put. On the other hand, traders exited from 8500 Call, while 8450 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 2.87% and reached 15.04. The 50-share CNX Nifty was up by 28.45 points or 0.34% to settle at 8,381.55.

Nifty June 2015 futures closed at 8377.40 on Tuesday at a discount of 4.15 points over spot closing of 8,381.55, while Nifty July 2015 futures ended at 8402.10 at a premium of 20.55 points over spot closing. Nifty June futures saw contraction of 1.12 million (mn) units, taking the total outstanding open interest (OI) to 11.80 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 0.75 points at 268.05 compared with spot closing of 267.30. The number of contracts traded were 40,603.

HDFC Bank June 2015 futures traded at a discount of 1.25 points at 1051.25 compared with spot closing of 1,052.50. The number of contracts traded were 50,581.

Axis Bank June 2015 futures traded at a premium of 1.15 points at 572.15 compared with spot closing of 571.00. The number of contracts traded were 33,834.

Reliance Industries June 2015 futures traded at a premium of 2.50 points at 995.70 compared with spot closing of 993.20. The number of contracts traded were 48,736.

Sun Pharmaceutical Industries June 2015 futures traded at a discount of 1.35 points at 855.75 compared with spot closing of 857.10. The number of contracts traded were 27,969.

Among Nifty calls, 8400 SP from the June month expiry was the most active call with a contraction of 0.23 million open interests.  Among Nifty puts, 8300 SP from the June month expiry was the most active put with an addition of 1.18 million open interests.  The maximum OI outstanding for Calls was at 8400 SP (4.87 mn) and that for Puts was at 8300 SP (5.82 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8408.35--- Pivot Point 8371.65--- Support --- 8344.85.

The Nifty Put Call Ratio (PCR) finally stood at 1.25 for June month contract.  The top five scrips with highest PCR on OI were JSW Steel (1.64), Maruti Suzuki (1.60), Bajaj-Auto (1.42), Havells (1.30) and M&M (1.24). 

Among most active underlying, State Bank of India witnessed a contraction of 1.50 million of Open Interest in the June month futures contract, followed by Reliance Industries witnessing a contraction of 5.76 million of Open Interest in the June month contract; HDFC Bank witnessed a contraction of 7.18 million of Open Interest in the June month contract, Axis Bank witnessed a contraction of 5.73 million of Open Interest in the June month contract and Maruti Suzuki witnessed a contraction of 0.55 units of Open Interest in the June month's future contract.