Nifty extends gain for fourth consecutive session

The fifty stock index -- Nifty -- continued its northward journey for fourth consecutive day on Monday and finished the choppy day of trade with a marginal gain of 10 points, as lenders advanced on hopes of stable asset quality after ICICI Bank's positive outlook and a decrease in bad loans at some of the state-run banks. Besides, a healthy sales growth in July posted by major car makers, including Maruti Suzuki and Tata Motors, coupled with better earnings by some blue-chips, came as a positive. On the global front, Asian markets closed lower as China shares were dragged down by poor manufacturing figures, while the European markets were down in their early trade. The survey of Chinese manufacturing activity showed a drop to a two-year low in July, suggesting the world's second largest economy faces challenges in the third quarter.

Back home, the benchmark began the August month on a somber note as investors largely remained influenced by the daunting sentiments prevailing in Asian markets. However, the indices entered into the positive terrain sooner than later, driven by a strong rally in banking, auto and realty stocks. Sentiment got a boost on reports that the seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI)-a composite single-figure indicator of manufacturing performance came at a six-month high of 52.7 in July, from 51.3 in June. Mood remained firm as buying activity gathered pace on expectations that liquidity may pick up as Employees’ Provident Fund Organisation (EPFO) will start investing in the equity market this week. Though, the key gauges suffered a setback in afternoon trades as sudden bouts of profit booking emerged in the local markets immediately after a somber European market opening. Investors remained cautious about the logjam in the parliament with protests by Opposition members led by the Congress continuing in the Lok Sabha, forcing the adjournment of the House. With nearly half of the Parliament Monsoon Session nearly washed out there is hardly any chance that any important bill will be passed. Also, there was some cautiousness ahead of the RBI’s monetary policy review slated tomorrow. RBI is expected to keep key policy rates unchanged at its policy review on Tuesday, but some investors remained hopeful that the fall in crude oil prices and slowing core sector growth may lead to a surprise cut by the central bank. But some final hour profit booking followed by mild short covering ensured that the key gauge end the session on consolidated note with modest gains. Traders were seen piling position in Consumer Durables, Bankex and Power stock while selling was witnessed in Metal, Oil & Gas and IT sector stocks.

The top gainers from the F&O segment were JP Associate, Sun TV Network and Jaiprakash Power Ventures. On the other hand, the top losers were HCL Technologies, Jindal Steel & Power and TVS Motor Company. In the index options segment, maximum OI was being seen in the 8800-9000 calls and 8200-8400 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 5.63% and reached 15.39. The 50-share CNX Nifty was up by 10.20 points or 0.12% to settle at 8,543.05.

Nifty August 2015 futures closed at 8561.70 on Monday at a premium of 18.65 points over spot closing of 8,543.05, while Nifty September 2015 futures ended at 8598.45 at a premium of 55.40 points over spot closing. Nifty August futures saw contraction of 0.40 million (mn) units, taking the total outstanding open interest (OI) to 16.85 million (mn) units. The near month derivatives contract will expire on August 27, 2015.

From the most active contracts, ICICI Bank August 2015 futures traded at premium of 1.40 points at 313.65 compared with spot closing of 312.25. The number of contracts traded were 37,884.

SBI August 2015 futures traded at a premium of 0.40 points at 281.65 compared with spot closing of 281.25. The number of contracts traded were 38,780.

Tata Motors August 2015 futures traded at a premium of 0.30 points at 387.85 compared with spot closing of 387.55. The number of contracts traded were 20,975.

Reliance August 2015 futures traded at a premium of 5.45 points at 1007.45 compared with spot closing of 1,002.00. The number of contracts traded were 19,440.

Axis Bank August 2015 futures traded at a premium of 3.10 points at 578.10 compared with spot closing of 575.00. The number of contracts traded were 17,569.

Among Nifty calls, 8700 SP from the August month expiry was the most active call with a contraction of 0.09 million open interests.  Among Nifty puts, 8500 SP from the August month expiry was the most active put with an addition of 0.27 million open interests. The maximum OI outstanding for Calls was at 8800 SP (3.54 mn) and that for Puts was at 8200 SP (4.15 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8568.63 --- Pivot Point 8538.37 --- Support --- 8512.78.

The Nifty Put Call Ratio (PCR) finally stood at 1.04 for August month contract.  The top five scrips with highest PCR on OI were KSCL (2.67), Bosch (2), JSW Steel (1.84), Dr. Reddys Laboratories (1.64) and Aditya Birla Nuvo (1.51). 

Among most active underlying, State Bank of India witnessed a contraction of 3.55 million of Open Interest in the August month futures contract, followed by ICICI Bank witnessing a contraction of 7.62 million of Open Interest in the August month contract; Larsen & Toubro witnessed an addition of 0.33 million of Open Interest in the August month contract, Bharat Forge witnessed an addition of 0.09 million of Open Interest in the August month contract and Hero MotoCorp witnessed an addition of 0.22 million units of Open Interest in the August month's future contract.