Nifty ends above 7,200 level

The fifty stock index - Nifty - ended higher with gain of over quarter a percent on the back of buying by fund and retail investors. Sentiment got boost with Moody's Investors Service stating that Indian economy will grow at 7.5 percent in 2016 and 2017 as it is relatively less exposed to external headwinds, like China slowdown, and will benefit from lower commodity prices. On the global front, Asian markets ended mostly in red, as a rally in oil prices reversed and investors remained cautious about the outlook for the global economy. European markets traded mixed on Friday as investors eyed the latest moves in oil and digested the latest earnings reports.

Back home, after getting negative start, Indian equity benchmark continued to trade choppy for the most part of the day’s trade as sentiments were downbeat with Fitch Ratings stating that with many PSU banks’ profitability taking a big hit, their credit profile will come under pressure unless they are adequately capitalized. It pointed to significant quarterly losses at several large public sector banks (PSBs) last week, underscoring long-standing balance-sheet and capital risks stemming from legacy issues pertaining to poor asset quality and weak provisioning. However, good buying was witnessed in the last leg of trade that lifted the Nifty to reclaim 7,200 level and finally ended with gain of over 19 points.      

The top gainers from the F&O segment were Punjab National Bank, Power Finance Corporation and BEML. On the other hand, the top losers were Hindustan Petroleum Corporation, Indian Oil Corporation and Unitech. In the index options segment, maximum OI was being seen in the 7000-7800 calls and 6700-7400 puts. In today's session, while the traders preferred to exit 6500 put, heavy buildup was seen in the 7200 put. On the other hand, traders exited from 7100 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 2.65% and reached 20.91. The 50-share Nifty was up by 19.00 points or 0.26% to settle at 7,210.75.   

Nifty February 2016 futures closed 7212.45 on Friday at a premium of 1.70 points over spot closing of 7,210.75, while Nifty March 2016 futures ended at 7232.20 at a premium of 21.45 points over spot closing. Nifty February futures saw contraction of 1.07 million (mn) units, taking the total outstanding open interest (OI) to 20.55 million (mn) units. The near month derivatives contract will expire on February 25, 2016.                    

From the most active contracts, ICICI Bank February 2016 futures traded at a premium of 0.80 points at 198.90 compared with spot closing of 198.10. The number of contracts traded were 19,630.            

SBI February 2016 futures traded at a discount of 0.40 points at 164.50 compared with spot closing of 164.90. The number of contracts traded were 26,768.                      

Axis Bank February 2016 futures traded at a premium of 1.60 points at 393.80 compared with spot closing of 392.20. The number of contracts traded were 15,924.                                              

Punjab National Bank February 2016 futures traded at a premium of 0.30 points at 76.25 compared with spot closing of 75.95. The number of contracts traded were 10,684.                     

Bharat Heavy Electricals February 2016 futures traded at a premium of 0.45 points at 102.15 compared with spot closing of 101.70. The number of contracts traded were 10,427.          

Among Nifty calls, 7200 SP from the January month expiry was the most active call with an addition of 0.38 million open interests. Among Nifty puts, 7100 SP from the January month expiry was the most active put with a contraction of 0.47 million open interests. The maximum OI outstanding for Calls was at 7400 SP (6.05 mn) and that for Puts was at 7000 SP (5.36 mn). The respective Support and Resistance levels of Nifty are: Resistance 7243.08 --- Pivot Point 7194.52 --- Support --- 7162.18.            

The Nifty Put Call Ratio (PCR) finally stood at 0.83 for January month contract. The top five scrips with highest PCR on OI were Hero MotoCorp (2.29), Godrej Consumer Products (2.00), Eicher Motors (1.55), Oil India (1.50) and Bank of Baroda (1.33). 

Among most active underlying, State Bank of India witnessed a contraction of 1.37 million of Open Interest in the January month futures contract, followed by Tata Steel witnessing a contraction of 0.68 million of Open Interest in the January month contract; Reliance Industries witnessed a contraction of 1.46 million of Open Interest in the January month contract, ICICI Bank witnessed a contraction of 2.01 million of Open Interest in the January month contract and Maruti Suzuki India witnessed a contraction of 0.06 million units of Open Interest in the January month's future contract.