Nifty extends gain for second consecutive session; closes above 7850 level

The fifty stock index -- Nifty -- continued its northward journey for second consecutive day on Thursday and finished the volatile day of trade with a gain of 22 points or 0.29%, on value-buying coupled with short-covering by participants amid expiry of September derivatives contracts.  Besides, expectation that the Reserve Bank of India (RBI) might go in for another rate-cut, its fourth for the year, at its policy meet next week also aided sentiment. On the global front, Asian stocks ended mixed as soft manufacturing data from China and the U.S. fueled worries about global growth. Sliding carmakers dragged European stocks lower after a German newspaper stated that a BMW AG vehicle broke EU pollution limits.

Back home, the benchmark got off to a pessimistic start following the Asian peers as sentiments got pressured after more dour economic news in China and the United States piled pressure on riskier assets.  Further, sentiments remained subdued with a World Bank report terming India’s urbanisation as “messy and hidden” and calling for initiatives at the policy and institutional level to tap the economic potential it offers. The World Bank said there has been difficulty in dealing with pressures that increased urban populations put on basic services, infrastructure, land, housing and environment. After trading with moderate cuts through the morning session, the key index gradually crawled into the green territory as sentiment got some support with chief economic adviser Arvind Subramanian’s statement that India does not need further fiscal stimulus to revive the economy, despite record low inflation and growth seen at the lower end of an 8.1-8.5 percent target this financial year. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 1330.12 crore on September 23, 2015. Short covering intensified in late hours of trade which stoked the bourses to the highest point in the session. Finally some profit booking in the dying moments of trade led the index snap the session below the session’s highs. Traders were seen piling position in IT, Consumer Durables and Teck stocks while selling was witnessed in Metal, Capital Goods and PSU sector stocks.

The domestic index CNX Nifty finished the September F&O series with a cut of 80 points or 1.01%.  Many traders rolled over positions in the futures & options (F&O) segment from the September 2015 series to October 2015 series. Sectorally, telecom, infrastructure and metals stocks have been witnessing high rollover of positions while stocks from the oil & gas, media and power space are witnessing relatively low rolls into the October series. Meanwhile, the top gainers from the F&O segment were South Indian Bank, Hindustan Zinc and Jaiprakash Power Ventures. On the other hand, the top losers were Oil & Natural Gas Corporation, NMDC and Adani Ports and Special Economic Zone.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 0.94% and reached 20.88. The 50-share CNX Nifty was up by 22.55 points or 0.29% to settle at 7,868.50.

Among Nifty calls, 8200 SP from the October month expiry was the most active call with an addition of 2.85 million open interests.  Among Nifty puts, 7800 SP from the October month expiry was the most active put with an addition of 0.65 million open interests. The maximum OI outstanding for Calls was at 8300 SP (2.70 mn) and that for Puts was at 7800 SP (3.31 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7907.30 --- Pivot Point 7855.70 --- Support --- 7816.90.

The Nifty Put Call Ratio (PCR) finally stood at 1.17 for October month contract.  The top five scrips with highest PCR on OI were Indraprastha Gas (6.78), Colgate Palmolive (India) (1.65), ACC (1.62), Godrej Industries (1.52) and SAIL (1.51).   

Among most active underlying, Reliance Industries witnessed an addition of 8.59 million of Open Interest in the October month futures contract, followed by Maruti Suzuki witnessing an addition of 0.65 million of Open Interest in the October month contract; Infosys witnessed an addition of 3.12 million of Open Interest in the October month contract, State Bank of India witnessed an addition of 9.66 million of Open Interest in the October month contract and ICICI Bank witnessed an addition of 16.95 million units of Open Interest in the October month's future contract.