Nifty gains after previous session’s consolidation; ends above 8,450 mark

After witnessing consolidation in previous session, domestic index Nifty heaved a sigh of relief garnering a gain in Friday’s trade on renewed buying interest by foreign investors and higher government spending. Foreign portfolio investors bought shares worth a net Rs 575.32 crore on July 2, 2015. Further, to improve farm productivity, the government has decided to spend Rs 50,000 crore over the next five years under the Pradhan Mantri Krishi Sinchai Yojana (PMKSY). On global front, Asian markets retreated on Friday ahead of the weekend's Greek referendum that could decide its eurozone future, while Shanghai plunged more than five percent, at the end of a torrid week for mainland investors. European stocks edged lower in early trade as the outcome of Greece's bailout terms looks uncertain and economic data from the US overnight failed to buoy sentiment.

Back home, after getting a cautious start, nifty showed some strength in morning trades, on emergence of buying by funds and retail investors in select stocks. Sentiments remained up-beat with the Reserve Bank of India governor, Raghuram Rajan’s statement that the Indian economy was in a recovery phase and also that India’s exposure to Greece is limited and there will be little impact of the fallout. Some support also came with Urban Development Minister M Venkaiah Naidu statement that India's economy is back on track and the country's growth rate is likely to cross eight per cent in the coming years. However, a weak trend at other Asian & European markets due to uncertainties surrounding the Greece referendum limited the gains in the domestic bourse. Moreover, investors remained concerned on report that Services sector has extended the contraction trend for the second straight month in June, with new orders declining for the first time in 14 months. Thereafter, the index kept oscillating in a narrow range for most part of the day, ending the session above its crucial 8,450 mark with a gain of forty points. Traders were seen piling position in Banking, Capital Goods and FMCG stocks while selling was witnessed in Metal, Realty and Auto sector stocks.

The top gainers from the F&O segment were United Breweries, Union Bank of India and Oriental Bank of Commerce. On the other hand, the top losers were Jaiprakash Power Ventures, Jindal Steel & Power and Eicher Motors. In the index options segment, maximum OI was being seen in the 8400-8600 calls and 8000-7800 puts. In today's session, while the traders preferred to exit 8100 put, heavy buildup was seen in the 8500 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 4.80% and reached 16.30. The 50-share CNX Nifty was down by 40.00 points or 0.47% to settle at 8,484.90. Nifty July 2015 futures closed at 8488.00 on Friday at a premium of 3.10 points over spot closing of 8,484.90, while Nifty August 2015 futures ended at 8523.65 at a primium of 38.75 points over spot closing. Nifty July futures saw addition of 0.38 million (mn) units, taking the total outstandingopen interest (OI) to 17.35 million (mn) units. The near month derivativescontract will expire on July 30, 2015.

From the most active contracts, State Bank of India July2015 futures traded at premium of 0.45 points at 269.90 compared with spotclosing of 269.45. The number of contracts traded were 16,853.

ICICI Bank July 2015 futures traded at a premium of 0.10points at 315.10 compared with spot closing of 315.00. The number of contractstraded were 15,832.

Reliance Industries July 2015 futures traded at a premium of6.85 points at 1012.25 compared with spot closing of 1005.40. The number ofcontracts traded were 18,709.

HDFC Bank July 2015 futures traded at a premium of 1.55points at 1077.55 compared with spot closing of 1076.00. The number ofcontracts traded were 20,457.

Axis Bank July 2015 futures traded at a discount of 4.40points at 582.50 compared with spot closing of 586.90. The number of contractstraded were 19,337.

Among Nifty calls, 8600 SP from the July month expiry was the most active call with an addition of 0.21 million open interests.  Among Nifty puts, 8300 SP from the July month expiry was the most active put with a contraction of 0.50 million open interests.  The maximum OI outstanding for Calls was at 8500 SP (4.59 mn) and that for Puts was at 8000 SP (5.46 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8513.72 --- Pivot Point 8468.93--- Support --- 8440.12.

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 Just Dial (1.23), Bosch (1.13), Divis Lab (1.08), Grasim (1.07) and JSW Steel (1.07).

Among most active underlying, Eicher Motors witnessed an addition of 0.24 million of Open Interest in the July month futures contract, followed by Kotak Mahindra Bank witnessing an addition of 0.14 million of Open Interest in the July month contract; Reliance Industries witnessed an addition of 0.03 million of Open Interest in the Julymonth contract, State Bank of India witnessed an addition of 0.56 million of Open Interest in the July month contract and Axis Bank witnessed a contraction of 0.53 units of Open Interest in the July month's future contract.