Nifty surges for second consecutive session; closes above 8400 mark

The fifty stock index -- Nifty -- continued its northward journey for second consecutive day on Thursday and finished the excellent day of trade with a gain of 46.75 points or 0.56%, as investors indulged in covering their short positions in view of the monthly expiry in the derivatives segment amid positive global cues. Sentiments were boosted after Cabinet approved amendments to the GST bill raising hopes of passage by Parliament. On the global front, Asian markets ended mostly in red, but the Japanese market ended with a gain of over a percent after the dollar strengthened against yen. The European shares traded higher in early trade as investors keep an eye on a bumper morning of earnings and remain focused on continuing volatility in China markets.

Back home, the benchmark got off to a rollicking opening as investors rejoiced after the Federal Reserve said the economy and job market continued to strengthen and left its key interest rate unchanged. Some support also came with a statement of World Bank official that India has the potential to become a multi-trillion dollar economy with a per capita income of about $40,000 by 2050 if it manages to grow at seven percent annually for the next 30-35 years. Besides, the Union Cabinet has given approval for the proposal permitting foreign entities to invest in Alternative Investment Funds (AIFs) set up under SEBI, so as to attract more overseas money in the country. However, the optimism soon started showing signs of easing in late afternoon trade and profit booking witnessed in few sectors. Investors turned nervous with Moody’s cautioned against tampering with the independence of the Reserve Bank of India (RBI) in deciding on interest rates saying it would hurt India’s economic prospects. It also raised a red flag over the Parliament logjam and added that it is denting business confidence as key reform bills like land and GST are stuck. Even so, the final hour buying ensured that the key index do not shut shop way below the intraday highs. Traders were seen piling position in Realty, FMCG and Power stock while selling was witnessed in Metal, IT and TECK sector stocks. Eventually, Nifty ended the session above its crucial 8,400 mark with a gain of over half a percent.

The domestic index CNX Nifty finished the July F&O series with a gain of merely 23 points or 0.28%.  Many traders rolled over positions in the futures & options (F&O) segment from the July 2015 series to august 2015 series. Sectorally, infrastructure, capital goods and pharma stocks were witnessing high rollover of positions, while stocks from the power, finance and media space were witnessing relatively low rolls into the August series. Meanwhile, the top gainers from the F&O segment were Unitech, Punjab National Bank and Jaiprakash Associates. On the other hand, the top losers were Ajanta Pharma, NMDC and Sun Pharmaceuticals Industries.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 3.47% and reached 15.32. The 50-share CNX Nifty was up by 46.75 points or 0.56% to settle at 8,421.80.

Nifty August 2015 futures closed at 8461.75 on Thursday at a premium of 39.95 points over spot closing of 8,421.80, while Nifty September 2015 futures ended at 8502.15 at a premium of 80.35 points over spot closing. Nifty August futures saw addition of 3.98 million (mn) units, taking the total outstanding open interest (OI) to 16.60 million (mn) units. The near month derivatives contract will expire on August 27, 2015.

From the most active contracts, SBI August 2015 futures traded at premium of 0.55 points at 258.40 compared with spot closing of 257.85. The number of contracts traded were 32,922.

Tata Motors August 2015 futures traded at a premium of 0.10 points at 379.10 compared with spot closing of 379.00. The number of contracts traded were 37,904.

Reliance August 2015 futures traded at a premium of 7.30 points at 1007.30 compared with spot closing of 1,000.00. The number of contracts traded were 40,830.

Yes Bank August 2015 futures traded at a premium of 4.40 points at 817.75 compared with spot closing of 813.35. The number of contracts traded were 31,038.

L & T August 2015 futures traded at a premium of 9.80 points at 1783.15 compared with spot closing of 1,773.35. The number of contracts traded were 29,832.

Among Nifty calls, 8500 SP from the August month expiry was the most active call with an addition of 0.65 million open interests.  Among Nifty puts, 8400 SP from the August month expiry was the most active put with an addition of 0.56 million open interests. The maximum OI outstanding for Calls was at 9000 SP (3.02 mn) and that for Puts was at 8200 SP (3.71 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8451.03 --- Pivot Point 8429.67 --- Support --- 8400.43.

The Nifty Put Call Ratio (PCR) finally stood at 0.90 for August month contract.  The top five scrips with highest PCR on OI were India Cements (19.74), Pidilite Industries (4.40), JSW Steel (2.31), Oil India (2.14) and SAIL (1.27). 

Among most active underlying, Reliance Industries witnessed an addition of 4.21 million of Open Interest in the August month futures contract, followed by Bank of Baroda witnessing an addition of 13.05 million of Open Interest in the August month contract; ITC witnessed an addition of 4.25 million of Open Interest in the August month contract, Dr. Reddy's Laboratories witnessed an addition of 0.30 million of Open Interest in the August month contract and State Bank of India witnessed an addition of 1.48 million units of Open Interest in the August month's future contract.