Bulls continue to show aggression; Nifty ends above 8600 level

CNX Nifty continued its bull run for second straight session and finished the wonderful day of trade with a gain of about a percent reclaiming its crucial 8,600 level led by financials shares on hopes of a rate-cut by the central bank, while oil shares firmed up on softening global crude oil prices. On the global front, Asian markets ended mostly higher amid a rebound in Chinese shares after the sharp fall in the previous session. Further, European shares opened higher after Greece's parliament approved the bailout package presented by prime minister Alexis Tsipras.

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’s parliament endorsed the fresh set of austerity measures. The sentiments also got a boost with Iran reaching a deal with the world powers which would allow the country to sell its crude without sanction, got supported with Petroleum Minister Dharmendra Pradhan's statement that International oil prices will come down with the imminent lifting of sanctions against Iran and benefit India. Besides, rate sensitive shares were gaining across the exchange on hopes of a rate cut on the back of narrowing trade deficit data because of declining crude oil prices. Hopes of order inflows from Europe post the Greek bailout deal too influenced sentiments.  Second half of trade brought some more cheer to the market and it touched its intraday highs after the Cabinet cleared a proposal to merge the limits of foreign direct and portfolio investments into composite caps to make foreign investment regime easier. Some support also came with India’s trade deficit narrowed to 10.8 billion in June as compared to 11.7 billion in same month previous year. However, country’s exports contracted for the seventh straight month by 15.82 percent to $22.2 billion on account of slump in global demand. Meanwhile, Investors look towards the monsoon session of parliament next week where key proposals including land acquisition and national tax reforms are expected to be debated.

The top gainers from the F&O segment were Rural Electrification Corporation, Tata Chemicals and JSW Steel. On the other hand, the top losers were South Indian Bank, JSW Energy and Indiabulls Real Estate. In the index options segment, maximum OI was being seen in the 8500-8800 calls and 8300-8500 puts. In today's session, while the traders preferred to exit 8400 put, heavy buildup was seen in the 8500 put. On the other hand, traders exited from 8800 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 5.04% and reached 14.78. The 50-share CNX Nifty was up by 84.25 points or 0.99% to settle at 8,608.05.

Nifty July 2015 futures closed at 8626.65 on Thursday at a premium of 18.60 points over spot closing of 8,608.05, while Nifty August 2015 futures ended at 8661.25 at a premium of 53.20 points over spot closing. Nifty July futures saw addition of 0.79 million (mn) units, taking the total outstanding open interest (OI) to 21.28 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 0.30 points at 272.70 compared with spot closing of 272.40. The number of contracts traded were 22,379.

ICICI Bank July 2015 futures traded at a premium of 1.60 points at 318.50 compared with spot closing of 316.90. The number of contracts traded were 24,993.

Tata Motors July 2015 futures traded at a premium of 1.50 points at 396.00 compared with spot closing of 394.50. The number of contracts traded were 15,489.

Reliance July 2015 futures traded at a premium of 5.85 points at 1028.20 compared with spot closing of 1,022.35. The number of contracts traded were 32,820.

HDFC Bank July 2015 futures traded at a premium of 2.00 points at 1118.10 compared with spot closing of 1116.10. The number of contracts traded were 26,022.

Among Nifty calls, 8600 SP from the July month expiry was the most active call with a contraction of 0.18 million open interests.  Among Nifty puts, 8500 SP from the July month expiry was the most active put with an addition of 1.61 million open interests.  The maximum OI outstanding for Calls was at 8600 SP (4.03 mn) and that for Puts was at 8400 SP (5.40 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8635.13--- Pivot Point 8589.02--- Support --- 8561.93.

The Nifty Put Call Ratio (PCR) finally stood at 1.54 for July month contract.  The top five scrips with highest PCR on OI were Dr. Reddys Laboratories (1.41), BHEL (1.22), Eicher Motors (1.12), JSW Steel (1.12) and Hindustan Petroleum Corporation (1.11).

Among most active underlying, Axis Bank witnessed an addition of 1.29 million of Open Interest in the July month futures contract, followed by Reliance Industries witnessing an addition of 0.24 million of Open Interest in the July month contract; Yes Bank witnessed a contraction of 0.44 million of Open Interest in the July month contract, ICICI Bank witnessed an addition of 2.98 million of Open Interest in the July month contract and State Bank of India witnessed an addition of 0.15 million units of Open Interest in the July month's future contract.