Nifty reclaims 8100 mark; surge over 2%

The fifty stock index -- Nifty -- staged a blockbuster performance on the first day of a week by vehemently rallying over two percent in the session and re-conquering its psychological 8100 level on the back of broad-based buying. Sentiments remained up-beat as a number of commercial banks have announced a reduction in their base rate during the past few days in the wake of a steeper-than-expected 50 basis points cut in the repo rate announced by the Reserve Bank of India (RBI) after a regular monetary policy review early last week. On the global front, Asian stocks ended higher after weak US jobs data eased worries that the US Fed would hike interest rates this year. Shares in Japan and Hong Kong gained the most with benchmarks Nikkei and Hang Seng gaining over 1.5% each. Further, European shares climbed higher in early trade, with a surge in Glencore lifting the mining sector and firmer oil prices giving energy stocks a boost.

Back home, the benchmark got off to a rollicking opening as investors rejoiced after weak US jobs data raised expectations that the US Federal Reserve may further delay the much-awaited rate hike well into the first quarter of 2016. Some support also came with reports that the government may extend export incentives such as cheap credit to even large players in sectors like pharmaceuticals, chemicals and electronics.  Post the smart start the benchmark didn’t have to look back through the session as they kept moving from strength to strength with the support of encouraging global and domestic leads. Sentiments got some support with economic affairs secretary Shaktikanta Das’ statement that India is rolling out the red carpet for overseas investors with sweeping foreign investment policy reform and quicker approvals. He said that Foreign Investment Promotion Board (FIPB) will now meet twice a month to speed up approvals, signaling the clear intent of the government to push ahead with reforms on a wide range of issues. Eventually, Nifty finished the session above its crucial 8,100 mark with a gain of over two percent supported by index heavyweights viz, Tata steel, Tata Motors and ICICI Bank. On the NSE sectoral space, the financial counter garnered maximum traction and surged by over three and half percent on the back of solid gains in bellwethers like PFC, REC and ICICI Bank which rallied 11.55%, 7.11% and 5.28% respectively. The Metal pocket too witnessed huge buying interests as it gained well over three percent while Banking, Automobile and IT sectors too remained among prominent gainers. Banking stocks outperformed on the report that Cabinet is likely to consider this week a proposal to recast Rs 4.3 lakh crore loans of nine state power distribution companies with a view to bring down their liabilities.

The top gainers from the F&O segment were Jindal Steel & Power, Power Finance Corporation and Rural Electrification Corporation. On the other hand, the top losers were Maruti Suzuki India, Amtek Auto and Dabur India. In the index options segment, maximum OI was being seen in the 8000-8300 calls and 7500-7800 puts. In today's session, the 8300, 8400 and 8500 Call strikes saw addition of 2.29, 5.03 and 3.08 lakh shares, respectively. On the other hand, 8100, 8000 and 7900 Put strikes saw addition of 12.67, 13 and 11.68 lakh shares, respectively.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 0.55% and reached 19.12. The 50-share CNX Nifty was up by 168.40 points or 2.12% to settle at 8,119.30. Nifty October 2015 futures closed at 8132.80 on Monday at a premium of 13.50 points over spot closing of 8,119.30, while Nifty November 2015 futures ended at 8170.40 at a premium of 51.10 points over spot closing. Nifty October futures saw addition of 1.24 million (mn) units, taking the total outstanding open interest (OI) to 20.33 million (mn) units. The near month derivatives contract will expire on October 29, 2015.  

From the most active contracts, SBI Bank October 2015 futures traded at discount of 0.40 points at 240.80 compared with spot closing of 241.20. The number of contracts traded were 31,095.

ICICI Bank October 2015 futures traded at a premium of 0.15 points at 281.35 compared with spot closing of 281.20. The number of contracts traded were 28,515.

Tata Motors October 2015 futures traded at a premium of 1.30 points at 316.30 compared with spot closing of 315.00. The number of contracts traded were 35,642.

Axis Bank October 2015 futures traded at a premium of 1.30 points at 514.60 compared with spot closing of 513.30. The number of contracts traded were 27,674. 

Reliance October 2015 futures traded at a discount of 0.15 points at 889.35 compared with spot closing of 889.50. The number of contracts traded were 26,779. 

Among Nifty calls, 8200 SP from the October month expiry was the most active call with an addition of 0.17 million open interests.  Among Nifty puts, 8000 SP from the October month expiry was the most active put with an addition of 1.30 million open interests. The maximum OI outstanding for Calls was at 8300 SP (4.41 mn) and that for Puts was at 7500 SP (5.05 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8163.77--- Pivot Point 8084.43--- Support --- 8039.97.

The Nifty Put Call Ratio (PCR) finally stood at 1.21 for October month contract.  The top five scrips with highest PCR on OI were Lupin (1.45), Indraprastha Gas (1.41), Amtek Auto (1.37), Bata India (1.36) and Hero MotoCorp (1.20).   

Among most active underlying, Maruti Suzuki India witnessed an addition of 0.02 million of Open Interest in the October month futures contract, followed by State Bank of India witnessing an addition of 1.69 million of Open Interest in the October month contract; ICICI Bank witnessed a contraction of 2.04 million of Open Interest in the October month contract, Reliance Industries witnessed a contraction of 0.91 million of Open Interest in the October month contract and Tata Motors witnessed a contraction of 2.23 million units of Open Interest in the October month's future contract.