Nifty ends with marginal gains; holds 7850 mark

The fifty stock index -- Nifty -- clocked modest gains on Friday but recorded their first weekly gain in four weeks, on account of buying in front line blue chip counters taking cues from global counterparts. Sentiments got some support with Credit Suisse’s report that Low inflation and optimism are encouraging urban consumers to spend more, in turn sending out early signs of a revival in the Indian economy. Also, front loaded stimulus this year by the central government now seems to be showing up in economic momentum in some of the segments like automobiles, power and oil. On the global front, Asian markets closed mostly higher on Friday, as investors bet the US Federal Reserve would raise rates in December but proceed cautiously with any further tightening. Japanese shares hit a fresh three-month high on Friday, closing higher for the fourth fourth session in a row. However, Commodity prices were pressured, with copper near 6-1/2-year lows and a major sea freight index hitting its lowest level on record, underscoring worries over slackening world demand.  European shares are seen slipping slightly a day after the Pan-European stock index hit a three month high, with spreadbetters expecting Germany's DAX to fall 0.12 percent and France's CAC 40 0.2 percent.

Back home, market got off to a soft start as the index showed signs of consolidation in early trade, a session after the awesome one percent rally. But the frontline index slowly but steadily started gathering steam and surged by around half a percent by early trades. Sentiment got a boost with Finance Minister Arun Jaitley vowing corruption-free governance, reasonable tax rates and non-discretionary allotment of natural resources to make it easier for companies to do business in India. Appreciation in the rupee too aided the sentiment. Rising for the second straight day, the rupee gained 9 paise to 66.09 against the US dollar in early trade, as the greenback fell in overseas markets on hopes that the post the liftoff, any rate hike by the US Federal Reserve would only be gradual. The frontline index sooner than later capitalized on the momentum and crossed the psychological 7900 level. Thereafter, market traded in the tight range till mid afternoon trade lingering near its crucial 7900 mark but, it was the final hour of trade where market witnessed steep fall as European counterparts drifted downward after a positive start. Investors remained concerned over the Fitch report that indicated that a proposed 23.6 percent hike in salaries and pensions for about 10 million current and former government employees in India could hurt the country's finances and underscore the weakness in its sovereign credit profile. Fitch said the pay hike could challenge the government's goal of achieving a fiscal deficit of 3.5 percent in the year ending in March 2017, unless India can cut spending or raise revenues. However, some last minute short covering helped the index to end the session above its crucial 7,850 mark.  Meanwhile, Consumer goods stocks attracted investor attention as the proposed pay hike for government workers could add at least Rs 1 lakh crore to federal spending in 2016, raising hope some of that money would be spent by the employees. Shares of tea producers also rose on expectations that shortage of the commodity from drought-hit South Africa would lift prices next year.  Besides, a softening trend in the prices of crude oil coupled with strong expectation of a further fall in the crude oil prices have helped the oil, gas and exploration shares to post impressive surged on NSE.

The top gainers from the F&O segment were GAIL India, Just Dial and Indiabulls Housing Finance. On the other hand, the top losers were GMR Infrastructure, Bharti Infratel and ITC. In the index options segment, maximum OI was being seen in the 7900-8300 calls and 7500-7900 puts. In today's session, while the traders preferred to exit 7600 put, heavy buildup was seen in the 7900 put. On the other hand, traders exited from 7800 Call, while 7900 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 0.36% and reached 15.89. The 50-share Nifty was up by 13.80 points or 0.18% to settle at 7,856.55. 

Nifty November 2015 futures closed at 7851.60 on Friday at a discount of 4.95 points over spot closing of 7,856.55, while Nifty December 2015 futures ended at 7889.00 at a premium of 32.45 points over spot closing. Nifty November futures saw contraction of 0.89 million (mn) units, taking the total outstanding open interest (OI) to 15.78 million (mn) units. The near month derivatives contract will expire on November 26, 2015.  

From the most active contracts, ICICI Bank November 2015 futures traded at a discount of 0.45 points at 264.45 compared with spot closing of 264.90. The number of contracts traded were 13,789.      

SBI Bank November 2015 futures traded at a premium of 0.25 points at 243.25 compared with spot closing of 243.00. The number of contracts traded were 22,893.          

Axis Bank November 2015 futures traded at a premium of 0.50 points at 460.70 compared with spot closing of 460.20. The number of contracts traded were 18,616.    

Reliance November 2015 futures traded at a discount of 1.45 points at 946.55 compared with spot closing of 948.00. The number of contracts traded were 16,653.        

Yes Bank November 2015 futures traded at a premium of 1.35 points at 732.90 compared with spot closing of 731.55. The number of contracts traded were 12,719.        

Among Nifty calls, 7900 SP from the November month expiry was the most active call with a contraction of 0.08 million open interests.  Among Nifty puts, 7800 SP from the November month expiry was the most active put with a contraction of 0.48 million open interests. The maximum OI outstanding for Calls was at 8000 SP (5.93 mn) and that for Puts was at 7700 SP (5.17 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7903.07--- Pivot Point 7860.43--- Support --- 7813.92.

The Nifty Put Call Ratio (PCR) finally stood at 0.80 for November month contract.  The top five scrips with highest PCR on OI were STAR (1.77), Titan Company (1.54), BEML (1.33), IOB (1.28) and M&M (1.27).   

Among most active underlying, Maruti Suzuki India witnessed an addition of 0.13 million of Open Interest in the November month futures contract, followed by State Bank of India witnessing a contraction of 6.17 million of Open Interest in the November month contract; Reliance Industries witnessed a contraction of 1.89 million of Open Interest in the November month contract, Axis Bank witnessed a contraction of 3.34 million of Open Interest in the November month contract and Dr. Reddy's Laboratories witnessed a contraction of 0.22 million units of Open Interest in the November month's future contract.