Nifty snaps two days losing streak; ends tad below 8,300 mark

The local benchmark, Nifty witnessed exceptional recovery on Friday by snapping its two-day losing streak and ended the day’s trade tad below its crucial 8,300 level gaining over half a percent from its previous close. Sentiments remained up-beat with the Grant Thornton International Business Report (IBR), a quarterly global survey has stated that India Inc is the second most optimistic in terms of business optimism globally. On the global front, Asian equity markets ended in green on Friday, tracking the positive cues overnight from Wall Street after ECB hinted at further economic stimulus measures in December. Japan’s core inflation probably slipped for a second month in September, while factory output fell for a third month in a row, adding to headaches facing Bank of Japan policymakers as they head into a key policy meeting. European markets too made a strong start, supported by ECB President’s comments and as French economic output picked up in October to the fastest in four months.

Back home, after gap up opening, nifty showed some strength in early morning trades as risk appetite of investors globally improved across the risky asset classes on the likelihood of fresh economic stimulus infusion by the European Central Bank. Sentiments got a boost with a Moody's Investors Service’s report stating that India will clock the highest growth rate of 7-7.5 per cent among G20 economies in 2015 and 2016. It has said that India is less exposed to global risks because of its more resilient economic growth and the impact of positive policy reforms momentum. Further, some support also came with report that the government is likely to meet its fiscal deficit target this year despite risks of shortfall in tax collection and disinvestment proceeds, as it may go for a small reduction in public spending. Besides, the index oscillated in an extremely tight range through the session as market participants remained on the sidelines lacking any significant cues. Traders were seen piling position in Bankex, FMCG and Oil & Gas stocks, while selling was witnessed in Capital Goods, TECK and Auto sector stocks.

The top gainers from the F&O segment were Cadila Healthcare, Axis Bank and Just Dial. On the other hand, the top losers were Idea Cellular, Bharti Infratel and IFCI. 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 8100 put, heavy buildup was seen in the 8300 put. On the other hand, traders exited from 8300 Call, while 8400 call witnessed considerable OI addition. 

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 2.59% and reached 16.19. The 50-share CNX Nifty was up by 43.75 points or 0.53% to settle at 8,295.45.  Nifty October 2015 futures closed at 8304.15 on Friday at a premium of 8.70 points over spot closing of 8,295.45, while Nifty November 2015 futures ended at 8339.75 at a premium of 44.30 points over spot closing. Nifty October futures saw contraction of 0.51 million (mn) units, taking the total outstanding open interest (OI) to 18.52 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 0.15 points at 253.00 compared with spot closing of 253.15. The number of contracts traded were 25,582.   

ICICI Bank October 2015 futures traded at a discount of 0.10 points at 285.90 compared with spot closing of 286.00. The number of contracts traded were 17,187.      

Axis Bank October 2015 futures traded at a discount of 1.85 points at 525.15 compared with spot closing of 527.00. The number of contracts traded were 38,384.      

Tata Motors October 2015 futures traded at a premium of 0.60 points at 383.20 compared with spot closing of 382.60. The number of contracts traded were 25,454.  

Idea Cellular October 2015 futures traded at a premium of 0.30 points at 140.70 compared with spot closing of 140.40. The number of contracts traded were 16,481.    

Among Nifty calls, 8400 SP from the October month expiry was the most active call with an addition of 0.65 million open interests.  Among Nifty puts, 8300 SP from the October month expiry was the most active put with an addition of 0.82 million open interests. The maximum OI outstanding for Calls was at 8300 SP (5.51 mn) and that for Puts was at 8200 SP (5.40 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8322.12 --- Pivot Point 8301.43 --- Support --- 8274.77.

The Nifty Put Call Ratio (PCR) finally stood at 1.32 for October month contract.  The top five scrips with highest PCR on OI were Lupin (1.76), ZEEL (1.46), Tata Motors (1.27), STAR (1.19) and Hero MotoCorp (1.14).   

Among most active underlying, Reliance Industries witnessed a contraction of 4.71 million of Open Interest in the October month futures contract, followed by Axis Bank witnessing a contraction of 3.06 million of Open Interest in the October month contract; Maruti Suzuki India witnessed a contraction of 0.05 million of Open Interest in the October month contract, Infosys witnessed a contraction of 0.83 million of Open Interest in the October month contract and Larsen & Toubro witnessed a contraction of 0.49 million units of Open Interest in the October month's future contract.