Nifty sees triple digit rally on broadbased buying

The fifty stock index -- Nifty -- continued its northward journey for second consecutive day on Wednesday and finished the excellent day of trade with an outstanding gain of 105 points or 1.35%, on upbeat global markets and bigger-than-expected interest rate cut by Reserve Bank of India. Sentiments got some support with the Chief Economic Advisor Arvind Subramanian’s statement that the government is committed to contribute its share by adhering to its fiscal deficit target so that inflationary pressures remain under control. On the global front, Asian equity markets ended in green on Wednesday after sliding to three and a half year lows the previous day on concerns over a weak outlook for commodities amid slowing economic growth in China, Further, European shares rose in early trade after a two-day losing streak, with automakers boosted by a Chinese tax cut on small cars while miner Glencore rallied after saying it had no solvency issues.

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. Sentiments remained up-beat as RBI surprised markets with a bigger-than-expected 0.50 per cent cut in repo rates to 6.75 per cent.  The central bank also hiked limit for FPI investment in government bonds to 5 per cent of the outstanding stock by March, 2018, a move that will bring in an additional Rs. 1.2 lakh crore in G-Sec. Traders also got some support with a report that India has become the top destination for FDI in the world. With $31 billion of foreign capital inflows, India has surpassed China and the US to take the pole position in attracting largest FDI in the first half of 2015. The index kept oscillating in a narrow range near 7900 mark for most part of the day as banking stocks and oil shares come under pressure amid drop in the crude oil prices and ongoing crisis in China. Meanwhile, the Supreme Court's verdict in favour of Mauritius-based foreign fund Castleton Investment has shed more clarity over the applicability of minimum alternate tax (MAT) on foreign portfolio investors (FPIs). In the final hour of trade market regained its momentum and finished the day’s trade near its crucial 7,950 mark with triple digit rally supported by renewed buying interest in index heavyweights and pharma shares. Metal shares have also bounced back in today’s trade as commodity prices edged up overnight.

The top gainers from the F&O segment were Wockhardt, JSW Energy and Indiabulls Housing Finance. On the other hand, the top losers were Dish TV India, IDBI Bank and Union Bank of India. In the index options segment, maximum OI was being seen in the 8000-8300 calls and 7400-7600 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 9.01% and reached 19.62. The 50-share CNX Nifty was up by 105.60 points or 1.35% to settle at 7,948.90.

Among Nifty calls, 8100 SP from the September month expiry was the most active call with an addition of 0.06 million open interests.  Among Nifty puts, 7800 SP from the September month expiry was the most active put with an addition of 0.40 million open interests. The maximum OI outstanding for Calls was at 8200 SP (4.08 mn) and that for Puts was at 7800 SP (4.04 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7979.57--- Pivot Point 7927.03--- Support --- 7896.37.

The Nifty Put Call Ratio (PCR) finally stood at 1.10 for September month contract.  The top five scrips with highest PCR on OI were Bata India (1.35), Indraprastha Gas (1.29), Amtek Auto (1.19), SAIL (1.17) and Lupin (1.15).   

Among most active underlying, IDFC witnessed an addition of 2.93 million of Open Interest in the September month futures contract, followed by Axis Bank India witnessing an addition of 3.59 million of Open Interest in the September month contract; State Bank of India witnessed an addition of 3.67 million of Open Interest in the September month contract, Reliance Industries witnessed a contraction of 0.33 million of Open Interest in the September month contract and Maruti Suzuki India witnessed an addition of 0.17 million units of Open Interest in the September month's future contract.