Nifty snaps three-day losing streak; ends above 8,350 mark

After witnessing drubbing in the three previous sessions, domestic index, Nifty heaved a sigh of relief, settling with gains of thirty two points on back of improved prospects for a deal to keep Greece in the currency area at a weekend summit of European leaders. Besides, a firm rally in the Capital Goods shares on expectations of higher industrial growth in May lifted the sentiments. On global front, Asian markets closed mostly in green on Friday, as the Greek government proposed a broad financial overhaul to its creditors and Beijing's attempts to arrest a sharp slide in the Chinese market appeared to be working. Moreover, European counters were trading in green in early deals with CAC, DAX and FTSE were trading with a gain of over a percentage point.

Back home, after getting positive start, nifty showed some strength in morning trades, but the sentiments turned pessimistic in late morning trades and index start drifting lower, on speculation that faster inflation will deter the central bank from cutting interest rates. Concern over price pressures has resurfaced as potentially deficient monsoon rains threaten to hurt crops and stoke food costs, which make up about half of India’s CPI basket. Further, weakness in TCS shares after posting a meager 2.1% growth in its June quarter net profit coupled with loss in the FMCG on slowdown of monsoon have capped the upside gains. According to the India Meteorological Department (IMD) from June 1 until July 8, the country has registered an overall deficit rainfall of four per cent. Investors remained concerned over the report that foreign portfolio investors (FPIs) sold shares worth a net Rs 254 crore on July 9, 2015. However, sentiment got some support with an IMF report that India will be the world’s fastest growing economy for the second consecutive year in 2016 at 7.5 percent. IMF has retained India’s growth projection for current year at 7.5 percent which will be higher than China’s 6.8 percent. Market, for most of the session, see-saw around the neutral line as investors remained sideways in the absence of any significant trigger at domestic front. However, some value buying in dying hours helped market to end the session in the green, recapturing its crucial 8,350 mark. Traders were seen piling position in Banking, Capital Goods and Metal stocks while selling was witnessed in Realty, FMCG and Teck sector stocks.

The top gainers from the F&O segment were Vedanta, Tata Communications and Jindal Steel & Power. On the other hand, the top losers were Adani Power, Bharti Airtel and Idea Cellular. 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 8500 put, heavy buildup was seen in the 8400 put. On the other hand, traders exited from 9000 Call, while 8400 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 2.11% and reached 17.07. The 50-share CNX Nifty was up by 32.00 points or 0.38% to settle at 8,360.55. Nifty July 2015 futures closed at 8385.55 on Friday at a premium of 25.00 points over spot closing of 8,360.55, while Nifty August 2015 futures ended at 8423.65 at a primium of 63.10 points over spot closing. Nifty July futures saw addition of 0.43 million (mn) units, taking the total outstanding open interest (OI) to 18.30 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 1.50 points at 271.95 compared with spot closing of 270.45. The number of contracts traded were 19,580.

ICICI Bank July 2015 futures traded at a premium of 2.05 points at 314.75 compared with spot closing of 312.70. The number of contracts traded were 20,298.

Tata Motors July 2015 futures traded at a premium of 2.40 points at 403.55 compared with spot closing of 401.15. The number of contracts traded were 21,458.

Reliance July 2015 futures traded at a premium of 4.90 points at 1006.80 compared with spot closing of 1,001.90. The number of contracts traded were 27,712.

HDFC Bank July 2015 futures traded at a premium of 5.80 points at 1094.80 compared with spot closing of 1,089.00. The number of contracts traded were 23,428.

Among Nifty calls, 8500 SP from the July month expiry was the most active call with a contraction 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 0.06 million open interests.  The maximum OI outstanding for Calls was at 8400 SP (5.16 mn) and that for Puts was at 7900 SP (5.47 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8386.63--- Pivot Point 8351.02--- Support --- 8324.93.

The Nifty Put Call Ratio (PCR) finally stood at 1.21 for July month contract.  The top five scrips with highest PCR on OI were Dr. Reddys Laboratories (1.51), L&T (1.11), Eicher Motors (1.05), Amtek Auto (0.99) and ZEEL (0.92).

Among most active underlying, Tata Consultancy Services witnessed an addition of 0.65 million of Open Interest in the July month futures contract, followed by Reliance Industries witnessing an addition of 0.13 million of Open Interest in the July month contract; Larsen & Toubro witnessed an addition of 0.19 million of Open Interest in the July month contract, ICICI Bank witnessed an addition of 1.08 million of Open Interest in the July month contract and HDFC Bank witnessed an addition of 0.18 units of Open Interest in the July month's future contract.