Nifty extends gain for third consecutive session; closes above 8250 level

The fifty stock index -- Nifty -- continued its northward journey for third consecutive day on Monday and finished the range bond day of trade with a gain of 36 points or 0.45%, as sentiment got a boost on the report that the finance ministry will hold interactive meetings with foreign portfolio investors (FPIs) as well as domestic investors on October 20-21 to identify measures needed to further simplify processes and to increase retail participation in the financial markets. Furthermore, in order to attract more retail investors into the stock markets, the Department of Disinvestment (DoD) has suggested tax incentives for small investors.

On the global front, Asian markets ended mostly in green, though the Chinese market ended with mild losses, as China's  Gross domestic product grew 6.9 percent year-on-year in the third quarter, slightly slower than the 7 percent expansion seen in the first two quarters. Further, European markets trading mostly in green on Monday as investors focused on corporate earnings optimism after a mixed reaction in markets to Chinese growth data.

Back home, after gap up opening, nifty showed some strength in early morning trades however, it failed to breach the narrow 47-point range for most part of the day, ending the session above its crucial 8,250 mark with a gain of over four tens of a percent. Sentiments remained up-beat with the report that the government is likely to go for a fresh round of consultations on Goods and Service Tax (GST) with the opposition parties after the Bihar elections. Investors also took note of Reserve Bank Governor Raghuram Rajan statement who underlined the need to make taxation more transparent so that the Indian economy is able to attract stable inflow of foreign capital for strong growth. Appreciation in the rupee too supported the sentiment. The Indian rupee strengthened by 8 paise to 64.73 against the dollar in early trade on sustained selling of the US currency by exporters and banks. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 437 crore on October 16, 2015. However, some market participants remained cautiousness too on China's weak factory output numbers and sub-7 per cent GDP growth, which is lowest since 2009, stoking global economic concerns and putting metals stock under pressure. Traders were seen piling position in Realty, IT and Oil & Gas stocks, while selling was witnessed in Capital Goods, Metal and Consumer Durables sector stocks.

The top gainers from the F&O segment were IFCI, Amtek Auto and Indiabulls Real Estate. On the other hand, the top losers were LIC Housing Finance, Adani Enterprises and Oil & Natural Gas Corporation. In the index options segment, maximum OI was being seen in the 8200-8500 calls and 7800-8100 puts. In today's session, while the traders preferred to exit 7900 put, heavy buildup was seen in the 8200 put. On the other hand, traders exited from 8100 Call, while 8300 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 3.70% and reached 16.87. The 50-share CNX Nifty was up by 36.90 points or 0.45% to settle at 8,275.05.

Nifty October 2015 futures closed at 8270.75 on Monday at a discount of 4.30 points over spot closing of 8,275.05, while Nifty November 2015 futures ended at 8310.80 at a premium of 35.75 points over spot closing. Nifty October futures saw contraction of 0.39 million (mn) units, taking the total outstanding open interest (OI) to 19.93 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 0.25 points at 254.30 compared with spot closing of 254.05. The number of contracts traded were 20,801. 

ICICI Bank October 2015 futures traded at a premium of 0.45 points at 287.40 compared with spot closing of 286.95. The number of contracts traded were 13,903.    

IFCI October 2015 futures traded at a premium of 0.10 points at 29.10 compared with spot closing of 29.00. The number of contracts traded were 13,844.   

Axis Bank October 2015 futures traded at a discount of 0.05 points at 506.95 compared with spot closing of 507.00. The number of contracts traded were 18,926.  

Tata Motors October 2015 futures traded at a discount of 0.65 points at 378.20 compared with spot closing of 378.85. The number of contracts traded were 25,631.   Among Nifty calls, 8300 SP from the October month expiry was the most active call with an addition of 0.38 million open interests.  Among Nifty puts, 8300 SP from the October month expiry was the most active put with an addition of 0.38 million open interests. The maximum OI outstanding for Calls was at 8300 SP (5.78 mn) and that for Puts was at 8000 SP (5.73 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8292.33--- Pivot Point 8265.77--- Support --- 8248.48.

The Nifty Put Call Ratio (PCR) finally stood at 1.27 for October month contract.  The top five scrips with highest PCR on OI were Lupin (1.54), Tata Motors (1.32), ZEEL (1.24), Reliance Industries (1.09) and BPCL (1.08).   

Among most active underlying, Reliance Industries witnessed a contraction of 0.33 million of Open Interest in the October month futures contract, followed by HCL Technologies witnessing a contraction of 0.01 million of Open Interest in the October month contract; Infosys witnessed a contraction of 0.91 million of Open Interest in the October month contract, Tata Consultancy Services witnessed a contraction of 0.12 million of Open Interest in the October month contract and Tata Motors witnessed a contraction of 0.37 million units of Open Interest in the October month's future contract.