Nifty snaps six days losing streak; ends above 7,650 mark

After six days of consecutive declines, Nifty arrested its fall and surged over a percent on Thursday as investors bought into beaten down shares even as sentiment remained cautious ahead of the U.S. Federal Reserve meeting next week. Sentiments got a boost with Goldman Sachs’s report that the country's GDP is expected to grow by 7.9 per cent next fiscal driven by rising domestic demand and higher capital spending by the government, even though global economy will remain anemic. On the global front, Asian market ended mostly in red on Thursday as investors turned jittery after a third day of losses on Wall Street, with less than a week to go until the US Federal Reserve decides on whether to raise interest rates. Furthermore, European markets were seen falling for a third straight session, set to drop further from a 7-week low as commodity prices remained weak.

Back home, Indian benchmark Nifty witnessed a gap-up opening on account of value-based buying in blue-chips after recent losses coupled with covering-up of short positions by speculators. Thereafter, the fifty share index traded in a small range for most part of the session on absence of positive triggers. However, the index capitalized on the momentum and spurted in late afternoon trades on the back of broad based bottom fishing in undervalued stocks. The northbound journey only concluded with the close of the session helping the key gauge in recovering the ground lost in last trading session. Sentiments remained up-beat with report that indirect tax collection jumped 34.3 percent to Rs 438,291 crore during the first eight months of current financial year. Meanwhile, good demand was seen for real estate companies after the union cabinet has approved 20 major amendments to the real estate regulatory bill that seeks to protect home buyers as well as help investments in the real estate industry grow.  Shares of shipping companies have also rallied in today’s session on the report that the union cabinet chaired by Prime Minister Narendra Modi gave nod to the proposal for introducing steps to encourage shipbuilding and ship repair industry in India under the ‘Make in India’ initiative.

The top gainers from the F&O segment were Havells India, GMR Infrastructure and NCC. On the other hand, the top losers were Union Bank of India, Shriram Transport Finance Company and Rural Electrification Corporation. In the index options segment, maximum OI was being seen in the 8000-8400 calls and 7500-8000 puts. In today's session, while the traders preferred to exit 7900 put, heavy buildup was seen in the 7600 put. On the other hand, traders exited from 8400 Call, while 7700 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 2.58% and reached 16.29. The 50-share Nifty was up by 70.80 points or 0.93% to settle at 7,683.30. 

Nifty December 2015 futures closed at 7710.75 on Thursday at a premium of 27.45 points over spot closing of 7,683.30, while Nifty January 2016 futures ended at 7747.35 at a premium of 64.05 points over spot closing. Nifty December futures saw contraction of 0.69 million (mn) units, taking the total outstanding open interest (OI) to 18.86 million (mn) units. The near month derivatives contract will expire on December 31, 2015.        

From the most active contracts, SBI December 2015 futures traded at a premium of 1.20 points at 233.20 compared with spot closing of 232.00. The number of contracts traded were 11,758.     

Axis Bank December 2015 futures traded at a premium of 1.70 points at 452.35 compared with spot closing of 450.65. The number of contracts traded were 11,350.          

Tata Motors December 2015 futures traded at a premium of 1.75 points at 391.75 compared with spot closing of 389.00. The number of contracts traded were 11,252.           

Reliance Industries December 2015 futures traded at a premium of 3.40 points at 952.65 compared with spot closing of 949.25. The number of contracts traded were 14,457.              

Sun Pharmaceuticals Industries December 2015 futures traded at a premium of 4.75 points at 759.50 compared with spot closing of 754.75. The number of contracts traded were 11,637.         

Among Nifty calls, 7800 SP from the December month expiry was the most active call with an addition of 0.02 million open interests. Among Nifty puts, 7600 SP from the December month expiry was the most active put with an addition of 0.88 million open interests. The maximum OI outstanding for Calls was at 8000 SP (7.14 mn) and that for Puts was at 7500 SP (6.73 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7713.50--- Pivot Point 7661.75--- Support --- 7631.55.

The Nifty Put Call Ratio (PCR) finally stood at 0.86 for December month contract.  The top five scrips with highest PCR on OI were KSCL (1.20), STAR (1.19), Lupin (1.17), UCO Bank (1.07) and ACC (1.06).   

Among most active underlying, Havells India witnessed an addition of 1.99 million of Open Interest in the December month futures contract, followed by Reliance Industries witnessing a contraction of 1.02 million of Open Interest in the December month contract; Maruti Suzuki India witnessed a contraction of 0.01 million of Open Interest in the December month contract, Tata Motors witnessed an addition of 1.34 million of Open Interest in the December month contract and State Bank of India witnessed an addition of 3.14 million units of Open Interest in the December month's future contract.