Nifty makes triple digit gains; closes above 8600 level

The fifty stock index -- Nifty -- staged a blockbuster performance Wednesday, recouping two-day losses with the index marking a triple digit gain led by Oil & gas, banking, Infrastructure and financials stocks. Upmove in Indian markets came despite a steep fall in other Asian and European indices after overnight fall in the US markets. Sentiments got a boost with Goods and Services Tax (GST) panel submitting its report to Rajya Sabha, proposing three modifications related to clause 12, 18 and 19. On the global front, Asian stocks closed mostly lower on Wednesday, as weak commodity prices, disappointing earnings from U.S. tech giants and lingering uncertainty over when U.S. interest rates will rise kept investors on edge. Traders have positioned themselves for next week’s rate-setting FOMC meeting, although there is little chance the Fed will raise rates next week. Moreover, the European indices, including the CAC, DAX and FTSE have shed about 0.5% in early trades.

Back home, the benchmark got off to a somber opening, extending the downtrend for the third straight session as pessimistic sentiments prevailed across Asian markets. However, the indices entered into the positive terrain sooner than later, driven by value-buying in beaten-down stocks, while the adoption of a select committee report on a key national tax bill in parliament helped the sentiments. Bhupender Yadav, who heads the Rajya Sabha-appointed select panel on GST Bill, said that he is hopeful of the Bill getting passed in the monsoon session. The index further capitalized on the momentum and spurted in afternoon trades as improved rains and falling global crude prices, which boosted hopes of a rate cut by the Reserve Bank next month. The northbound journey only concluded with the close of the session helping the key gauge in recovering the ground lost in last two days. Some support also came with the government extending the interest subvention scheme to banks to ensure availability of crop loans of up to Rs 3 lakh to farmers at 7 percent per annum. The Union Cabinet, chaired by Prime Minister Narendra Modi, also decided to provide relief to farmers affected by natural calamities, where the interest subvention of 2 percent will continue to be available to banks for the first year on the restructured amount. However, some profit booking in Infosys and cautiousness ahead of Apple’s first earnings since Apple Watch debut was keeping the IT and tech stocks under pressure.

The top gainers from the F&O segment were Indiabulls Real Estate, Indiabulls Housing Finance and Arvind. On the other hand, the top losers were Lupin, Bata India and Sun TV Network. In the index options segment, maximum OI was being seen in the 8600-8800 calls and 8300-8500 puts. In today's session, while the traders preferred to exit 7800 put, heavy buildup was seen in the 8600 put. On the other hand, traders exited from 8500 Call, while 8700 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 0.22% and reached 15.13. The 50-share CNX Nifty was up by 104.05 points or 1.22% to settle at 8,633.50. Nifty July 2015 futures closed at 8648.40 on Wednesday at a premium of 14.90 points over spot closing of 8,633.50, while Nifty August 2015 futures ended at 8685.55 at a primium of 52.05 points over spot closing. Nifty July futures saw addition of 0.72 million (mn) units, taking the total outstanding open interest (OI) to 21.42 million (mn) units. The near month derivatives contract will expire on July 30, 2015.

From the most active contracts, SBI Bank July 2015 futures traded at premium of 0.65 points at 269.40 compared with spot closing of 268.75. The number of contracts traded were 18,154.

Tata Motors July 2015 futures traded at a premium of 1.80 points at 390.80 compared with spot closing of 389.00. The number of contracts traded were 22,615.

Reliance July 2015 futures traded at a premium of 1.55 points at 1053.45 compared with spot closing of 1,051.90. The number of contracts traded were 53,568.

HDFC Bank July 2015 futures traded at a premium of 5.20 points at 1118.70 compared with spot closing of 1,113.50. The number of contracts traded were 23,306.

Axis Bank July 2015 futures traded at a premium of 2.10 points at 591.60 compared with spot closing of 589.50. The number of contracts traded were 20,789.

Among Nifty calls, 8700 SP from the July month expiry was the most active call with an addition of 0.29 million open interests.  Among Nifty puts, 8500 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 8800 SP (4.66 mn) and that for Puts was at 8500 SP (6.84 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8685.38 --- Pivot Point 8592.02 --- Support --- 8540.13.

The Nifty Put Call Ratio (PCR) finally stood at 1.62 for July month contract.  The top five scrips with highest PCR on OI were Bosch (2.20), Dr. Reddys Laboratories (1.50), BHEL (1.34), ZEEL (1.32) and IndusInd Bank (1.24). 

Among most active underlying, Reliance Industries witnessed a contraction of 1.28 million of Open Interest in the July month futures contract, followed by Infosys witnessing an addition of 0.02 million of Open Interest in the July month contract; Eicher Motors witnessed a contraction of 0.08 million of Open Interest in the July month contract, Sun Pharmaceuticals Industries witnessed a contraction of 1.31 million of Open Interest in the July month contract and HDFC Bank witnessed a contraction of 0.26 million units of Open Interest in the July month's future contract.