Nifty resume northward journey on firm global cues

Indian equity benchmarks Nifty resumed its northward journey after a day’s break on Friday on back of rally in tech and commodity stocks as details from the last US Fed meeting indicated that it is in no rush to raise interest rates.  Also, there was some sense of support with the strength in rupee, which moved higher on sustained dollar selling by banks and exporters amid weak dollar overseas. On the global front, Asian equity markets ended in green, on improving risk appetite globally as minutes from Federal Reserve’s latest meeting further eroded expectations of a near-term US rate hike. Further, European counters made a firm start with CAC, DAX and FTSE were trading in the green with a gain of over a percent in early deals.

Back home, the benchmark got off to a rollicking opening as investors rejoiced after release of the minutes from the last Federal Reserve meeting indicated that the imminent rate hike may not happen soon in the wake of a weak global economic outlook. Further, Sentiment got a boost with Central Board of Excise and Customs statement that GST can be implemented anytime during a year and not only the beginning of a financial year. Some support also came with International Monetary Fund chief Christine Lagarde’s statement that the global lender may push ahead with interim steps to give emerging markets a bigger say, despite a stalemate in the US Congress over approval of broader governance reforms. After getting a gap-up start, the key index soon capitalized on the momentum and touched intraday highs in early morning session but the index failed to hold onto the highs and receded to intraday lows in late afternoon trades as traders turned cautious after the latest pre-poll survey has projected a big victory for the JD(U)-RJD-Congress alliance. The ‘Grand Alliance’, as it is called, is predicted to win 120-145 seats in the 243-member state assembly with about 46% vote-share.  Yet, final hour buying ensured that the key gauge do not shut shops way below the intraday high. Traders were seen piling position largely in IT, TECK and Metal stocks, while selling was witnessed in PSU, Consumer Durables and Power sector stocks. Further, Auto stocks also witnessed good buying interest after data released by Society of Indian Automobile Manufacturers (SIAM) said that domestic passenger car sales rose 9.48 per cent to 169,590 units in September from 154,898 units in the same month a year ago, while Realty stocks too remained higher, as the RBI has said that banks can provide home loans up to 90% for properties that cost up to Rs 30 lakh.

The top gainers from the F&O segment were Vedanta, Aurobindo Pharma and Tata Steel. On the other hand, the top losers were CEAT, JSW Energy and Coal India. In the index options segment, maximum OI was being seen in the 8200-8500 calls and 7800-8100 puts. In today's session, the 8200, 8300 and 8400 Call strikes saw addition of 2.48, 3.37 and 5.03 lakh shares, respectively. On the other hand, 8200, 8100 and 8000 Put strikes saw addition of 6.86, 1.67 and 2.14 lakh shares, respectively.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 3.26% and reached 18.92. The 50-share CNX Nifty was up by 60.35 points or 0.74% to settle at 8,189.70.

Nifty October 2015 futures closed at 8205.35 on Friday at a premium of 15.65 points over spot closing of 8,189.70, while Nifty November 2015 futures ended at 8247.75 at a premium of 58.05 points over spot closing. Nifty October futures saw addition of 0.04 million (mn) units, taking the total outstanding open interest (OI) to 21.25 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 premium of 0.40 points at 243.35 compared with spot closing of 242.95. The number of contracts traded were 32,857. 

Vedanta October 2015 futures traded at a discount of 0.50 points at 104.15 compared with spot closing of 104.65. The number of contracts traded were 36,206.

ICICI Bank October 2015 futures traded at a premium of 0.05 points at 286.30 compared with spot closing of 286.25. The number of contracts traded were 23,866. 

Axis Bank October 2015 futures traded at a premium of 3.20 points at 492.60 compared with spot closing of 489.40. The number of contracts traded were 29,256. 

Tata Motors October 2015 futures traded at a discount of 1.25 points at 356.25 compared with spot closing of 357.50. The number of contracts traded were 40,265.  

Among Nifty calls, 8300 SP from the October month expiry was the most active call with an addition of 0.07 million open interests.  Among Nifty puts, 8000 SP from the October month expiry was the most active put with an addition of 0.21 million open interests. The maximum OI outstanding for Calls was at 8300 SP (4.75 mn) and that for Puts was at 8100 SP (4.36 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8234.72--- Pivot Point 8187.18--- Support --- 8142.17.

The Nifty Put Call Ratio (PCR) finally stood at 1.26 for October month contract.  The top five scrips with highest PCR on OI were Indraprastha Gas (1.98), Exide Industries (1.36), Tata Steel (India) (1.25), Tata Motors (1.24) and HDFC (1.15).   

Among most active underlying, Infosys witnessed an addition of 0.74 million of Open Interest in the October month futures contract, followed by IndusInd Bank witnessing a contraction of 0.09 million of Open Interest in the October month contract; State Bank of India witnessed an addition of 2.12 million of Open Interest in the October month contract, Tata Motors witnessed a contraction of 0.16 million of Open Interest in the October month contract and Vedanta witnessed an addition of 0.77 million units of Open Interest in the October month's future contract.