Nifty ends range-bound session modestly higher

Post two continuous days of gains, Nifty consolidated on Friday, as investors sold financial stocks seeking more clarity on the government's decision to make foreign holdings fungible. Investors overlooked some improvement in rupee, which was trading higher on fresh selling of the American currency by exporters amid increased foreign capital inflows. On the global front, Asian markets closed the day on a positive note, tracking overnight gains in the US market. Further, Euro zone shares were steady in early trade as a relief rally over Greece's bailout agreement ran out of steam.

Back home, CNX nifty got off to a positive start in the morning trade on the back of sustained foreign capital inflows after government eased FDI rules and a firming trend at other Asian markets. Sentiments also got some support with the report that Reserve Bank India (RBI) has allowed banks to factor export receivables on a non-recourse basis, so as to enable exporters to improve their cash flow and meet their working capital requirements. Besides, expectations that a fall in global oil prices following a deal between world powers and Iran will provide enough cushion to RBI to cut rates, also supported the upside. However, the benchmark failed to capitalize on the initial momentum and continued to see-saw around the neutral line for most part of the day.  The losses in private banking shares after government decided to keep banks out of the composite foreign investment capped the offset gains in technology and healthcare stocks. Investors remained cautious as southwest monsoon remained 32% below normal in the first 15 days of July, which is the key month for sowing of kharif crops. This could have serious impact on the final output of pulses and oilseeds, unless there is a pick-up in the second half of this month.

The top gainers from the F&O segment were Ajanta Pharma, MindTree and CESC. On the other hand, the top losers were Asian Paints, Housing Development Finance Corporation and Unitech. In the index options segment, maximum OI was being seen in the 8600-8800 calls and 8200-8400 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 8900 Call, while 8800 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 0.14% and reached 14.80. The 50-share CNX Nifty was up by 1.80 points or 0.02% to settle at 8,609.85.

Nifty July 2015 futures closed at 8625.05 on Friday at a premium of 15.20 points over spot closing of 8,609.85, while Nifty August 2015 futures ended at 8662.10 at a premium of 52.25 points over spot closing. Nifty July futures saw contraction of 92,350 units, taking the total outstanding open interest (OI) to 21.18 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 discount of 0.30 points at 271.35 compared with spot closing of 271.65. The number of contracts traded were 15,315.

ICICI Bank July 2015 futures traded at a premium of 1.30 points at 318.40 compared with spot closing of 317.10. The number of contracts traded were 21,384.

Tata Motors July 2015 futures traded at a premium of 2.35 points at 399.35 compared with spot closing of 397.00. The number of contracts traded were 27,473.

Reliance July 2015 futures traded at a discount of 0.30 points at 1023.70 compared with spot closing of 1,024.00. The number of contracts traded were 21,736.

Axis Bank July 2015 futures traded at a premium of 1.30 points at 602.30 compared with spot closing of 601.00. The number of contracts traded were 29,561.

Among Nifty calls, 8700 SP from the July month expiry was the most active call with an addition of 0.27 million open interests.  Among Nifty puts, 8500 SP from the July month expiry was the most active put with an addition of 1.39 million open interests.  The maximum OI outstanding for Calls was at 8700 SP (4.23 mn) and that for Puts was at 8500 SP (6.60 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8637.48 --- Pivot Point 8615.32 --- Support --- 8587.68.

The Nifty Put Call Ratio (PCR) finally stood at 1.60 for July month contract.  The top five scrips with highest PCR on OI were Bosch (1.83), Dr. Reddys Laboratories (1.51), BHEL (1.42), Eicher Motors (1.12) and Grasim Industries (1.12). 

Among most active underlying, Axis Bank witnessed a contraction of 0.94 million of Open Interest in the July month futures contract, followed by Yes Bank witnessing a contraction of 0.61 million of Open Interest in the July month contract; ICICI Bank witnessed an addition of 0.20 million of Open Interest in the July month contract, Reliance Industries witnessed a contraction of 0.55 million of Open Interest in the July month contract and Infosys witnessed a contraction of 0.16 million units of Open Interest in the July month's future contract.