Nifty snaps four days losing streak; regains 8,350 mark

The fifty stock index -- Nifty -- managed to eke out small gains, reversing the four session fall, as investors bought beaten down but fundamentally strong stocks. On the global front, All the Asian markets ended in green, as calm returned to global markets after China's central bank said there was no basis for further depreciation of its yuan currency following a sharp devaluation this week. The European markets taking the cues from Asian markets rebounded after their biggest slump since October.

Back home, after getting a gap up start, Indian equity benchmark nifty touched day’s high in early trade as investors were largely optimistic on hopes of a rate cut in the next monetary policy after India's retail inflation fell to 3.78% in July from 5.40% in the month before and the growth in factory output accelerated to 3.8% in June from 2.7% in the previous month.  However, sentiments started fading away in afternoon trade as  the Monsoon Session of Rajya Sabha ended before lunch without the passage of the Goods and Services Tax (GST) Constitutional Amendment Bill, after opposition protests prevented the house from functioning every day of the three-week sitting. Besides, the rupee reversed its gains to slip near the key 65 per dollar mark against the US dollar on the back of unexpected devaluation of yuan, also weighed on sentiments. The session was volatile and the direction was changed several times as a result of the economic news on the both side of the Atlantic. Rate sensitive shares led by financials were among the top gainers on hopes that the central bank would ease rates on the back of encouraging economic data, while metal shares were among the top losers amid fears that exports to China could be hurt after the devaluation of the yuan. Nevertheless, some final hour profit booking followed by mild short covering ensured that the key index end the session on flat note with a positive bias.

The top gainers from the F&O segment were CEAT, Adani Ports and Special Economic Zone and SKS Microfinance. On the other hand, the top losers were Jindal Steel & Power, Reliance Communications and Vedanta. 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 8500 put, heavy buildup was seen in the 8400 put. On the other hand, traders exited from 8900 Call, while 8600 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 2.45% and reached 17.01. The 50-share CNX Nifty was up by 6.40 points or 0.08% to settle at 8,355.85. Nifty August 2015 futures closed at 8381.00 on Thursday at a premium of 25.15 points over spot closing of 8,355.85, while Nifty September 2015 futures ended at 8417.15 at a premium of 61.30 points over spot closing. Nifty August futures saw contraction of 0.32 million (mn) units, taking the total outstanding open interest (OI) to 15.69 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 0.30 points at 260.10 compared with spot closing of 260.40. The number of contracts traded were 25,008.

ICICI Bank August 2015 futures traded at a premium of 0.25 points at 293.20 compared with spot closing of 292.95. The number of contracts traded were 19,344.

Tata Motors August 2015 futures traded at a discount of 0.60 points at 350.00 compared with spot closing of 350.60. The number of contracts traded were 22,138.

Tata Steel August 2015 futures were trading flat compared with spot closing of 234.00. The number of contracts traded were 34,683.

Reliance August 2015 futures traded at a discount of 0.25 points at 938.15 compared with spot closing of 938.40. The number of contracts traded were 23,856.

Among Nifty calls, 8500 SP from the August month expiry was the most active call with an addition of 0.16 million open interests.  Among Nifty puts, 8300 SP from the August month expiry was the most active put with an addition of 0.09 million open interests. The maximum OI outstanding for Calls was at 8600 SP (5.19 mn) and that for Puts was at 8200 SP (5.86 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8410.32--- Pivot Point 8375.03--- Support --- 8320.57.

The Nifty Put Call Ratio (PCR) finally stood at 0.89 for August month contract.  The top five scrips with highest PCR on OI were Bosch (4), Dr. Reddys Laboratories (2.07), Maruti Suzuki India (1.53), Infosys (1.06) and Aditya Birla Nuvo (1). 

Among most active underlying, Tata Steel witnessed an addition of 1.19 million of Open Interest in the August month futures contract, followed by State Bank of India witnessing a contraction of 0.88 million of Open Interest in the August month contract; Reliance Industries witnessed a contraction of 0.21 million of Open Interest in the August month contract, Infosys witnessed a contraction of 0.58 million of Open Interest in the August month contract and Hindustan Petroleum Corporation witnessed a contraction of 0.23 million units of Open Interest in the August month's future contract.