Nifty ends higher amid firm global cues

The fifty stock index - Nifty - ended higher over two and half percent on Friday on account of sustained buying by fund and retail investors amid strong global cues. Sentiments remained upbeat with Prime Minister Narendra Modi’s statement that India is the fastest developing country among the ‘larger economies of the world’. He also said that India is the only economy which has not been affected by the global economic crisis that has hit the world. Besides, traders overlooked weak macro data of IIP and CPI inflation announced after the market hours on Friday. While, the Industrial output or index of industrial production (IIP) contracted an annual 1.3 percent in December, CPI inflation hit 17-month high in January at 5.69%. Meanwhile, the wholesale price index (WPI)-based inflation fell for the 15th straight month in January, dropping 0.90% compared to 0.73% in December. Meanwhile, shares of banking sector rallied on report that the government is likely to announce a series of banking reforms in the days to come. After getting a gap up opening, Indian equity benchmarks continued to trade with traction throughout the session and finally ended with gain of over 180 points. 

On the global front, Asian stocks rebounded from recent weakness as fears over global economic slowdown eased and as U.S. crude prices rallied from more than 12-year lows. European stock markets were trading higher on Monday after huge gains in Japan.       

The top gainers from the F&O segment were Bank of Baroda, UCO Ban and Vedanta. On the other hand, the top losers were Ajanta Pharma, Bharti Airtel and Aurobindo Pharma. In the index options segment, maximum OI was being seen in the 7000-8000 calls and 6500-7400 puts. In today's session, while the traders preferred to exit 7400 put, heavy buildup was seen in the 7100 put. On the other hand, traders exited from 7000 Call, while 7400 call witnessed considerable OI addition.  

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 9.31% and reached 22.37. The 50-share Nifty was up by 182 points or 2.61% to settle at 7,162.95.   

Nifty February 2016 futures closed 7161.45 on Monday at a discount of 1.50 points over spot closing of 7,162.95, while Nifty March 2016 futures ended at 7179.15 at a premium of 16.20 points over spot closing. Nifty February futures saw contraction of 0.40 million (mn) units, taking the total outstanding open interest (OI) to 20.42 million (mn) units. The near month derivatives contract will expire on February 25, 2016.                   

From the most active contracts, SBI February 2016 futures traded at a premium of 0.15 points at 167.55 compared with spot closing of 167.40. The number of contracts traded were 41,520.           

ICICI Bank February 2016 futures traded at a discount of 0.80 points at 202.85 compared with spot closing of 203.65. The number of contracts traded were 28,246.                 

Bank of Baroda February 2016 futures traded at a discount of 1.05 points at 139.00 compared with spot closing of 140.05. The number of contracts traded were 36,568.              

Axis Bank February 2016 futures traded at a premium of 3.10 points at 417.10 compared with spot closing of 414.00. The number of contracts traded were 21,118.                                              

Tata Motors February 2016 futures traded at a premium of 1.15 points at 317.20 compared with spot closing of 316.05. The number of contracts traded were 17,189. 

Among Nifty calls, 7200 SP from the January month expiry was the most active call with an addition of 0.03 million open interests. Among Nifty puts, 7000 SP from the January month expiry was the most active put with an addition of 0.87 million open interests. The maximum OI outstanding for Calls was at 7500 SP (5.89 mn) and that for Puts was at 7000 SP (5.42 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7211.57 --- Pivot Point 7134.18 --- Support --- 7085.57.         

The Nifty Put Call Ratio (PCR) finally stood at 0.77 for January month contract. The top five scrips with highest PCR on OI were Godrej Consumer Products (2.00), Bank of Baroda (1.50), Eicher Motors  (1.40), Oil India (1.38) and Tata Steel (1.27).   

Among most active underlying, State Bank of India witnessed a contraction of 6.51 million of Open Interest in the January month futures contract, followed by Bank of Baroda witnessing an addition of 7.13 million of Open Interest in the January month contract; Tata Steel witnessed an addition of 2.57 million of Open Interest in the January month contract, Larsen & Toubro witnessed a contraction of 0.17 million of Open Interest in the January month contract and ICICI Bank witnessed a contraction of 2.31 million units of Open Interest in the January month's future contract.