Nifty ends higher ahead of Fed meet outcome

A session after displaying a distressing performance, Indian benchmark Nifty managed to pull through a scintillating performance by vivaciously rallying about a percent on Wednesday, propped by upbeat Asian markets, even as the possibility of the U.S. Federal Reserve hiking interest rates for the first time in almost decade loomed. Sentiments remained optimistic with the hope that the Reserve Bank of India (RBI) would cut interest rates for a fourth time this year at its policy review on September 29, after data earlier this week showed consumer inflation easing to the lowest on record. On the global front, Asian markets closed mostly in green on Wednesday, with Shanghai Composite halting a two-day slump, as investors returned to the market amid speculation of state-led buying. Further, European counters too made a firm start with CAC, DAX and FTSE trading with a gain of around a percent in early deals. Investors continue to remain on their toes as the countdown to Thursday’s Federal Reserve interest rate decision continues. 

Back home, the benchmark nifty got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. Some support also came with the report that the government is considering allowing state retirement funds to invest more in equities and opening them up to private-sector management to improve returns, as Prime Minister Narendra Modi seeks to expand the country's tiny pensions net. Investors overlooked weak economic data that the exports fell for the ninth consecutive month, dipping by 20.66 per cent in August to $21.26 billion on the back of a steep decline in engineering and petroleum shipments. Second half of the session saw the key index capitalize on the momentum further and spurt to session’s highest levels on the back of broad based bottom fishing in undervalued stocks. Sentiments got boost with Cabinet approval of Shyama Prasad Mukherjee RURBAN Mission, allocating Rs 5,142 crore to develop 300 smart village clusters across the country. Also, there was report that the government panel set up to suggest a uniform rate of indirect tax under the GST regime will submit its report by this month-end and the roll out of the reform measure is possible any time next fiscal. Export-oriented IT and pharma stocks surged after overnight data in the US showed healthy growth in consumer spending. However, a mild profit booking in dying hour of trade ensured that the key index shut shops off the intraday highs. Traders were seen piling position in Banking, Power and Teck stocks while selling was witnessed in Consumer Durables, Oil & Gas and Capital Goods sector stocks. Finally, nifty ended the session tad below its crucial 7,900 mark with a gain of seventy points or 0.89%.

The top gainers from the F&O segment were Yes Bank, Crompton Greaves and Steel Authority of India. On the other hand, the top losers were Amtek Auto, Mcleod Russel India and Hindustan Petroleum Corporation. In the index options segment, maximum OI was being seen in the 7900-8200 calls and 7200-7500 puts. In today's session, some traders exited from 8000 and 8300 Call on the back of profit booking. On the other hand, 7900, 7800 and 7700 Put strikes saw addition of 3.68, 9.19 and 1.79 lakh shares, respectively.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 7.35% and reached 21.99. The 50-share CNX Nifty was up by 70.05 points or 0.89% to settle at 7899.15.

Nifty September 2015 futures closed at 7896.30 on Wednesday at a discount of 2.85 points over spot closing of 7,899.15, while Nifty October 2015 futures ended at 7931.15 at a premium of 32.00 points over spot closing. Nifty September futures saw contraction of 0.68 million (mn) units, taking the total outstanding open interest (OI) to 21.55 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 discount of 0.45 points at 236.40 compared with spot closing of 236.85. The number of contracts traded were 20,183.

ICICI Bank September 2015 futures traded at a premium of 0.35 points at 272.65 compared with spot closing of 272.30. The number of contracts traded were 18,476.

Tata Motors September 2015 futures traded at a premium of 1.10 points at 338.40 compared with spot closing of 337.30. The number of contracts traded were 17,313.

Tata Steel September 2015 futures traded at a premium of 0.45 points at 230.45 compared with spot closing of 230.00. The number of contracts traded were 16,753.

Axis Bank September 2015 futures traded at a premium of 0.10 points at 494.65 compared with spot closing of 494.55. The number of contracts traded were 24,758.

Among Nifty calls, 8000 SP from the September month expiry was the most active call with a contraction of 0.27 million open interests.  Among Nifty puts, 7800 SP from the September month expiry was the most active put with an addition of 0.91 million open interests. The maximum OI outstanding for Calls was at 8500 SP (3.84 mn) and that for Puts was at 7500 SP (4.85 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7924.27--- Pivot Point 7888.78--- Support --- 7863.67.

The Nifty Put Call Ratio (PCR) finally stood at 1.03 for September month contract.  The top five scrips with highest PCR on OI were Indraprastha Gas (1.58), Wipro (1.36), Yes Bank (1.10), IndusInd Bank (1.09) and Ceat (1.07).   

Among most active underlying, Yes Bank witnessed a contraction of 0.23 million of Open Interest in the September month futures contract, followed by State Bank of India witnessing a contraction of 2.93 million of Open Interest in the September month contract; Axis Bank witnessed a contraction of 1.28 million of Open Interest in the September month contract, Larsen & Toubro witnessed a contraction of 0.09 million of Open Interest in the September month contract and Eicher Motors witnessed an addition of 0.09 million units of Open Interest in the September month's future contract.