Nifty snaps two days losing streak; ends above 7,650 mark

After witnessing drubbing in the two previous sessions, domestic index, Nifty heaved a sigh of relief, settling with gains of over one and half a percent as the government assured investors that it is looking to take measures to support the economy and keep the reform process going. A firmer rupee, weakening oil prices and reports that an expert committee recommended removal of the Securities Transaction Tax (STT) in the derivatives segment also boosted investor confidence. On the global front, Asian markets barring KOSPI Composite and Nikkei closed in green on Tuesday. Shanghai Composite recovered from losses and ended the day 2.93 per cent higher after mixed trade data dragged stocks earlier in the day. Further, European markets were trading on a strong note in early trade. Germany's DAX was up 2.3% after data showed that German imports and exports hit record highs in July, pushing the trade surplus to a forecast-beating 22.8 billion euros. Britain's FTSE 100 and French CAC 40 indices also advanced around 2% each.

Back home, after getting a cautious start, Indian benchmark Nifty traded near neutral line in morning trade, lacking any significant upside triggers as investors engaged themselves in few stocks. However, sentiments turned optimistic in early afternoon after Prime Minister Narendra Modi met top CEOs, bankers, economists and ministers and discussed ways to bolster the economy amid global slowdown. The frontline index slowly but steadily started gathering steam and surged by over half a percent by noon trades. Firm opening in European counters too supported the sentiments, CAC, DAX and FTSE were trading with a gain of around a percent in early deals. The index further capitalized on the momentum and spurted in afternoon trades on the back of broad based bottom fishing in undervalued stocks. The market also got a lift from Chinese shares, which rose nearly 3 per cent as a surge in late-afternoon buying helped erase early losses. The northbound journey only concluded with the close of the session helping the key gauges in recovering the ground lost in the previous session. Some support also came with Finance Minister Arun Jaitley’s statement that "Global turmoil will have impact on equity and currencies, but we firmly believe that impact on India will be relatively less". He added that India's fundamentals are reasonably strong, and the country must use the opportunity to strengthen economy. Eventually Nifty ended the day’s trade near its intraday high with a gain of over one and half a percent. On the sectoral front, barring FMCG, all other BSE sectoral indices ended in the green. Among them, Bank Nifty index gained the most by 3.55 per cent, followed by CNX PSU Bank 3.47 per cent, CNX Realty 3.06 per cent and CNX Finance 2.87 per cent. On the other hand, CNXFMCG index was down 0.94 percent.

The top gainers from the F&O segment were JSW Energy, Crompton Greaves and Gail. On the other hand, the top losers were Amtek Auto, Kaveri Seed Company and Page Industries. In the index options segment, maximum OI was being seen in the 8200-8500 calls and 7500-7800 puts. In today's session, while the traders preferred to exit 8000 put, heavy buildup was seen in the 7500 put. On the other hand, traders exited from 8100 Call, while 7700 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 6.76% and reached 24.56. The 50-share CNX Nifty was up by 129.45 points or 1.71% to settle at 7,688.25. Nifty September 2015 futures closed at 7719.40 on Tuesday at a premium of 31.15 points over spot closing of 7,688.25, while Nifty October 2015 futures ended at 7756.45 at a premium of 68.20 points over spot closing. Nifty September futures saw addition of 0.17 million (mn) units, taking the total outstanding open interest (OI) to 23.74 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 229.40 compared with spot closing of 228.05. The number of contracts traded were 34,133.

ICICI Bank September 2015 futures traded at a premium of 0.15 points at 262.15 compared with spot closing of 262.00. The number of contracts traded were 31,005.

Tata Motors September 2015 futures traded at a premium of 0.65 points at 331.85 compared with spot closing of 331.20. The number of contracts traded were 20,608.

Tata Steel September 2015 futures traded at a premium of 0.95 points at 229.85 compared with spot closing of 228.90. The number of contracts traded were 17,741.

Reliance September 2015 futures traded at a premium of 2.95 points at 853.55 compared with spot closing of 850.60. The number of contracts traded were 24,375.

Among Nifty calls, 7800 SP from the September month expiry was the most active call with an addition of 0.70 million open interests.  Among Nifty puts, 7500 SP from the September month expiry was the most active put with an addition of 0.03 million open interests. The maximum OI outstanding for Calls was at 8500 SP (4.69 mn) and that for Puts was at 7500 SP (4.81 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7759.60--- Pivot Point 7649.55--- Support --- 7578.20.

The Nifty Put Call Ratio (PCR) finally stood at 1.01 for September month contract.  The top five scrips with highest PCR on OI were JSW Steel (1.26), Bajaj Finance (1.187), Ultratech Cement (1.07), Wipro (1.01) and NHPC (0.99).   

Among most active underlying, State Bank of India witnessed a contraction of 0.04 million of Open Interest in the September month futures contract, followed by Axis Bank witnessing an addition of 0.60 million of Open Interest in the September month contract; ICICI Bank witnessed an addition of 2.85 million of Open Interest in the September month contract, Reliance Industries witnessed an additional of 0.77 million of Open Interest in the September month contract and Yes Bank witnessed a contraction of 0.23 million units of Open Interest in the September month's future contract.