Bulls continue to show aggression; Nifty ends above 8450 level

The fifty stock index -- Nifty -- staged a blockbuster performance on the first day of a new month by vehemently rallying over a percentage point in the session and re-conquering its psychological 8450 level on the back of broad-based buying. Sentiments got a boost after May core sector growth signalled recovery in industrial activity while above normal monsoon rains and softening global crude oil prices boosted sentiment. Growth in production in the eight key infrastructure sectors hit a six-month high of 4.4% in May, after two consecutive months of decline. On global front, Asian markets closed mostly in green, while Chinese stocks tumbled in late trade, as margin traders unwound positions for a seventh straight day and data showed economic growth remaining sluggish. Moreover, European stocks surged early trade on renewed optimism about a possible deal between Greece and its creditors.

After a positive opening, market started extending its gain on sustained buying witnessed in all key heavyweights along with broader indices. The index reclaimed its crucial 8,400 mark as investor sentiments got some support with revenue secretary’s statement that the preparatory arrangements are in place to implement Goods and Services Tax from April 2016.  Besides, a firming trend in global markets, after Greek PM Alexis Tsipras was reportedly prepared to accept creditors’ demands for a bailout buoyed trading sentiments. Second half of trade brought some more cheer to the market and it touched its intraday highs as state-run banks rose after Minister of State for Finance, Jayant Sinha said that the government is working comprehensively on plan to recapitalise banks. The PSU Bank index on the National Stock Exchange jumped 2.5 percent; stocks such as Bank of India, Union Bank, IDBI Bank, Bank of Baroda and Oriental Bank of Commerce were among the top gainers. Eventually, Nifty finished the session above its crucial 8,450 mark with a gain of over 84 points supported by index heavyweights viz, Bank of Baroda, BHEL, Axis Bank and Ambuja Cements.

The top gainers from the F&O segment were Indraprastha Gas, Ceat and Union Bank of India. On the other hand, the top losers were Mcleod Russel India, Titan Company and Mahindra & Mahindra Financial Services. In the index options segment, maximum OI was being seen in the 8700-8500 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 8400 Call, while 8700 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.08% and reached 15.84. The 50-share CNX Nifty was up by 84.55 points or 1.01% to settle at 8,453.05.

Nifty July 2015 futures closed at 8455.20 on Wednesday at a premium of 2.15 points over spot closing of 8,453.05, while Nifty August 2015 futures ended at 8490.70 at a primium of 37.65 points over spot closing. Nifty July futures saw addition of 0.69 million (mn) units, taking the total outstanding open interest (OI) to 17.02 million (mn) units. The near month derivatives contract will expire on July 30, 2015.

From the most active contracts, State Bank of India July 2015 futures traded at premium of 1.30 points at 268.90 compared with spot closing of 267.60. The number of contracts traded were 31,474.

ICICI Bank July 2015 futures traded at a premium of 1.35 points at 313.80 compared with spot closing of 312.45. The number of contracts traded were 21,767.

Reliance Industries July 2015 futures traded at a premium of 5.45 points at 1011.45 compared with spot closing of 1006.00. The number of contracts traded were 27,642.

HDFC Bank July 2015 futures traded at a discount of 4.85 points at 1066.65 compared with spot closing of 1071.50. The number of contracts traded were 19,167.

Tata Motors July 2015 futures traded at a discount of 0.40 points at 445.60 compared with spot closing of 446.00. The number of contracts traded were 26,020.

Among Nifty calls, 8500 SP from the July month expiry was the most active call with a contraction of 0.12 million open interests.  Among Nifty puts, 8300 SP from the July month expiry was the most active put with an addition of 0.98 million open interests.  The maximum OI outstanding for Calls was at 8500 SP (3.36 mn) and that for Puts was at 8000 SP (5.84 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8499.72--- Pivot Point 8434.93--- Support --- 8388.27.

The Nifty Put Call Ratio (PCR) finally stood at 1.46 for July month contract.  The top five scrips with highest PCR on OI were Divis Lab (1.25), Just Dial (1.22), Dr. Reddys Laboratories (1.10), Maruti Suzuki (1.08) and Syndicate Bank (1.08).

Among most active underlying, State Bank of India witnessed an addition of 1.13 million of Open Interest in the July month futures contract, followed by Reliance Industries witnessing a contraction of 0.97 million of Open Interest in the July month contract; Axis Bank witnessed an addition of 1.13 million of Open Interest in the Julymonth contract, Indraprastha Gas witnessed an addition of 0.61 million of Open Interest in the July month contract and Eicher Motors witnessed an addition of 0.03 units of Open Interest in the July month's future contract.