Nifty extends gain for second consecutive session

The fifty stock index -- Nifty -- continued its northward journey for second consecutive day on Thursday and finished the choppy day of trade with a gain of 20 points, as gains in pharma and capital goods shares helped offset losses in FMCG and Metal shares. On the global front, the Asian markets ended mostly in red, while Japanese market ended higher on yen weakness against dollar. Further, European counters were trading choppy in early deals, led by weakness in the energy and mining sectors, as investors focused on a mixed bag of corporate earnings.

Back home, after getting a cautious but positive start, CNX Nifty traded in tight range, altering between positive and negative territory in first half of the session tracking subdued cues from the Asian front, but some selective buying in index heavyweights help the index touch intraday high and trade above 8600 mark in second half of the session. However, the key index failed to holds its crucial 8600 mark and slipped below it due to some high level profit booking. Eventually, nifty ended its session with the gain of 20 points. The sentiments remained optimistic with RBI Governor Raghuram Rajan’s statement that the central bank will cut interest rate provided it feels confident that inflation will remain below 6 percent even after the reduction. Some support also came with retirement fund manager Employees Provident Fund Organisation (EPFO) entering the stock market through exchange-traded funds (ETFs). The retirement fund manager will invest up to 5% or Rs 5,000 crore and Rs 6,000 crore of its incremental corpus in ETFs between 6 August and 31 March 2016. Buying in software counter too helped in markets up-move taking cues from the earnings of the US-headquartered Cognizant Technology Solutions, which reported a 6% sequential growth in revenues for the June quarter and also raised its annual guidance. However, losses in financials coupled with weakness in FMCG major ITC have capped the gain on the upside. Investors remained on the sidelines and refrained from any buying activity ahead of Friday’s crucial jobs data that is likely to give clues regarding the timing of a rate increase by the U.S. Federal Reserve.

The top gainers from the F&O segment were Jaiprakash Power Ventures, Indraprastha Gas and Union Bank of India. On the other hand, the top losers were Bata India, Motherson Sumi Systems and Adani Enterprises. In the index options segment, maximum OI was being seen in the 8600-8900 calls and 8200-8400 puts. In today's session, while the traders preferred to exit 8900 put, heavy buildup was seen in the 8400 put. On the other hand, traders exited from 8500 Call, while 8600 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 0.44% and reached 14.73. The 50-share CNX Nifty was up by 20.70 points or 0.24% to settle at 8,588.65. Nifty August 2015 futures closed at 8615.00 on Wednesday at a premium of 26.35 points over spot closing of 8,588.65, while Nifty September 2015 futures ended at 8652.70 at a premium of 64.05 points over spot closing. Nifty August futures saw addition of 0.22 million (mn) units, taking the total outstanding open interest (OI) to 16.88 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 discount of 0.40 points at 289.60 compared with spot closing of 290.00. The number of contracts traded were 26,010.

ICICI Bank August 2015 futures traded at a premium of 0.85 points at 312.35 compared with spot closing of 311.50. The number of contracts traded were 17,510.

Tata Motors August 2015 futures traded at a premium of 1.80 points at 384.40 compared with spot closing of 382.60. The number of contracts traded were 27,909.

Infosys August 2015 futures traded at a premium of 3.80 points at 1091.80 compared with spot closing of 1,088.00. The number of contracts traded were 15,548.

Sun Pharmaceuticals August 2015 futures traded at a premium of 2.20 points at 847.25 compared with spot closing of 845.05. The number of contracts traded were 17,199.

Among Nifty calls, 8700 SP from the August month expiry was the most active call with an addition of 0.04 million open interests.  Among Nifty puts, 8500 SP from the August month expiry was the most active put with an addition of 0.37 million open interests. The maximum OI outstanding for Calls was at 8800 SP (4.86 mn) and that for Puts was at 8200 SP (5.77 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8612.80 --- Pivot Point 8582.15 --- Support --- 8558.00.

The Nifty Put Call Ratio (PCR) finally stood at 1.15 for August month contract.  The top five scrips with highest PCR on OI were Bosch (2.67), Dr. Reddys Laboratories (1.89), Aditya Birla Nuvo (1.56), Maruti Suzuki India (1.38) and Union Bank Of India (1.31). 

Among most active underlying, Arvind witnessed an addition of 0.12 million of Open Interest in the August month futures contract, followed by Larsen & Toubro witnessing a contraction of 0.10 million of Open Interest in the August month contract; State Bank of India witnessed a contraction of 0.48 million of Open Interest in the August month contract, Dr. Reddy's Laboratories  witnessed an addition of 0.09 million of Open Interest in the August month contract and ICICI Bank witnessed a contraction of 0.31 million units of Open Interest in the August month's future contract.