Nifty snaps three days losing streak; ends above 7700 mark

A rebound in global exchanges coupled with notification of the latest reform in the retrospective tax regime buoyed investor sentiments leading to a barometer index Nifty to end session with the gain of 106 points of 1.37 percent. Sentiment got a boost after India's services industry grew for a second month in August, the Nikkei/Markit Services Purchasing Managers' Index rose to 51.8 in August from July's 50.8. On the global front, Asian shares ended in green after Wall Street rebounded from a sharp sell-off and as a holiday in China gave investors a break from its torrid markets. Major European markets were over 1.5 per cent higher in early trade ahead of the European Central Bank's (ECB) monetary policy decision. However, some traders remained cautious ahead of US monthly jobs report which may indicate whether Fed will raise rates in September policy or not

Back home, after witnessing a steep fall for last three trading sessions, CNX Nifty rebounded in today’s trade and ended firm on the back of renewed buying across the bourses. Sentiments remained up-beat with chief economic adviser at the finance ministry Arvind Subramanian’s comments that the Indian economy is still expected to grow around 8 percent in the fiscal year to March 2016, after economic growth slowed to 7 percent in the quarter to June. Some support also came with the statement of International Monetary Fund (IMF) that near-term growth prospects remain favourable in India but some macroeconomic imbalances still exist. Further, buying got intensified after European counters have made a positive start and rallied over 1.5 percent in early deals. However, there was some cautious, as India's June-September monsoon rains are likely to be below the prior forecast of 88 percent of the long-term average, which could make it the driest year since 2009 and reduce farm output. Finally, Nifty ended the session above its crucial 7,700 mark with a gain of over a percentage point. All the sectoral indices posted notable gains, barring Pharma index, the realty was the top gainer, up by 4.71%, led by DLF on rate cut hopes from RBI when it reviews its monetary policy on September 29.

]The top gainers from the F&O segment were DLF, JSW Energy and Indiabulls Real Estate. On the other hand, the top losers were Amtek Auto, Kaveri Seed Company and Idea Cellular. In the index options segment, maximum OI was being seen in the 8200-8500 calls and 7800-8000 puts. In today's session, while the traders preferred to exit 8000 put, heavy buildup was seen in the 7900 put. On the other hand, traders exited from 8600 Call, while 8200 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 9.51% and reached 24.11. The 50-share CNX Nifty was up by 106.00 points or 1.37% to settle at 7,823. Nifty September 2015 futures closed at 7842.55 on Thursday at a premium of 19.55 points over spot closing of 7,823.00, while Nifty October 2015 futures ended at 7883.80 at a premium of 60.80 points over spot closing. Nifty September futures saw contraction of 0.09 million (mn) units, taking the total outstanding open interest (OI) to 22.68 million (mn) units. The near month derivatives contract will expire on September 24, 2015. 

From the most active contracts, SBI September 2015 futures traded at premium of 1.35 points at 233.20 compared with spot closing of 231.85. The number of contracts traded were 30,410.

ICICI Bank September 2015 futures traded at a premium of 0.80 points at 267.90 compared with spot closing of 267.10. The number of contracts traded were 24,912.

Tata Motors September 2015 futures traded at a premium of 1.15 points at 332.85 compared with spot closing of 331.70. The number of contracts traded were 22,176.

DLF September 2015 futures traded at a premium of 0.10 points at 121.10 compared with spot closing of 121.00. The number of contracts traded were 22,882.

Tata Steel September 2015 futures traded at a premium of 1.10 points at 230.65 compared with spot closing of 229.55. The number of contracts traded were 16,096.

Among Nifty calls, 8200 SP from the September month expiry was the most active call with an addition of 0.71 million open interests.  Among Nifty puts, 7500 SP from the September month expiry was the most active put with an addition of 0.31 million open interests. The maximum OI outstanding for Calls was at 8500 SP (4.70 mn) and that for Puts was at 7800 SP (4.60 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7861.05 --- Pivot Point 7807.55 --- Support --- 7769.50.

The Nifty Put Call Ratio (PCR) finally stood at 1.08 for September month contract.  The top five scrips with highest PCR on OI were Indraprastha Gas (1.50), JSW Steel (1.31), Wipro (1.10), Apollo Hospitals Enterprise (1.05) and Canara Bank (0.99).   

Among most active underlying, State Bank of India witnessed an addition of 0.18 million of Open Interest in the September month futures contract, followed by DLF witnessing an addition of 1.72 million of Open Interest in the September month contract; Axis Bank witnessed a contraction of 0.83 million of Open Interest in the September month contract, ICICI Bank witnessed a contraction of 0.31 million of Open Interest in the September month contract and Maruti Suzuki witnessed an addition of 0.05 million units of Open Interest in the September month's future contract.