Bulls continue to show aggression; Nifty ends tad below 8000 level

CNX Nifty showcased yet another courageous performance and went on to outclass indices around the world by vivaciously rallying by over a percentage points in the session and settling just below the psychological 8,000 mark. Sentiments turned optimistic after the US Federal Reserve's decision to maintain status quo on key policy rates, easing concerns over foreign fund outflows while hopes that the Reserve Bank of India may reduce key policy rates also aided sentiment.  On the global front, Asian markets closed mostly in green on Friday, following a decision by the US Federal Reserve to keep rates unchanged. However, European shares slipped in early session as the Federal Reserve's downbeat comments on the global economy overshadowed its decision to hold rates steady.

Back home, the benchmark got off to a boisterous opening on expectations that the Reserve Bank of India (RBI) will have scope to cut its key lending rate later this month after the US Federal Reserve kept its interest rates unchanged. Sentiments got a boost with Minister of State for Finance Jayant Sinha’s statement that the government is aiming for an 8-10 percent annual economic growth through supply-side measures to increase the capacity of Asia`s third-largest economy rather than risk higher inflation by stimulating demand. Some support also came with the Economic Affairs Secretary Shaktikanta Das’ statement that US Fed decision to hold rates gives more room to emerging markets for policy adjustment. The key index soon capitalized on the momentum and touched intraday highs in early afternoon session but they failed to hold onto the highs and receded to intraday lows in late afternoon trades post weak European market opening on Federal Reserve’s cautious stance regarding the global economic outlook. Finally, nifty ended the session tad below its crucial 8000 mark with a gain of over eighty points or 1.05%. Traders were seen piling position in Realty, Banking and PSU stocks, while selling was witnessed in FMCG, Consumer Durables and Capital Goods sector stocks.

The top gainers from the F&O segment were UCO Bank, Housing Development and Infrastructure and Jaiprakash Associates. On the other hand, the top losers were SKS Microfinance, Bajaj Finance and Mcleod Russel India. 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 7900 and 8000 Call on the back of profit booking. On the other hand, 8100, 8000 and 7900 Put strikes saw addition of 1.38, 7.29 and 4.30 lakh shares, respectively.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 16.84% and reached 18.29. The 50-share CNX Nifty was up by 82.75 points or 1.05% to settle at 7,981.90. Nifty September 2015 futures closed at 7982.55 on Friday at a premium of 0.65 points over spot closing of 7,981.90, while Nifty October 2015 futures ended at 8018.70 at a premium of 36.80 points over spot closing. Nifty September futures saw addition of 0.29 million (mn) units, taking the total outstanding open interest (OI) to 21.85 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 1.65 points at 242.35 compared with spot closing of 240.70. The number of contracts traded were 33,146.

ICICI Bank September 2015 futures traded at a premium of 2.95 points at 278.35 compared with spot closing of 275.40. The number of contracts traded were 31,906.

Tata Motors September 2015 futures traded at a discount of 3.50 points at 328.85 compared with spot closing of 332.35. The number of contracts traded were 54,971.

Reliance September 2015 futures traded at a premium of 2.85 points at 894.55 compared with spot closing of 891.70. The number of contracts traded were 40,283.

Axis Bank September 2015 futures traded at a discount of 2.70 points at 516.90 compared with spot closing of 519.60. The number of contracts traded were 39,844.

Among Nifty calls, 8000 SP from the September month expiry was the most active call with a contraction of 1.02 million open interests.  Among Nifty puts, 7900 SP from the September month expiry was the most active put with an addition of 0.43 million open interests. The maximum OI outstanding for Calls was at 8500 SP (3.46 mn) and that for Puts was at 7500 SP (4.52 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8039.32--- Pivot Point 7997.58--- Support --- 7940.17.

The Nifty Put Call Ratio (PCR) finally stood at 1.17 for September month contract.  The top five scrips with highest PCR on OI were Wipro (1.71), Indraprastha Gas (1.63), IndusInd Bank (1.31), ZEEL (1.21) and Tech Mahindra (1.18).   

Among most active underlying, State Bank of India witnessed a contraction of 2.12 million of Open Interest in the September month futures contract, followed by Reliance Industries witnessing a contraction of 2.45 million of Open Interest in the September month contract; Axis Bank witnessed a contraction of 2.57 million of Open Interest in the September month contract, ICICI Bank witnessed a contraction of 1.13 million of Open Interest in the September month contract and Tata Motors witnessed an addition of 0.09 million units of Open Interest in the September month's future contract.