Nifty ends higher for second straight day on Wednesday

The fifty shares of index -- Nifty --  ended higher with the gains of over two percent on Wednesday, following the government pledged support to keep state-owned banks in good health and the Reserve Bank of India eased rules on their core capital requirements under the upcoming Basel III norms. Investors also drew comfort from a rally in Asian shares, which touched two-month highs, as overnight gains in oil prices and a batch of positive economic data from Australia to the United States calmed fears of a global economic slowdown. The sentiment too improved with the private report that the India's GDP growth is likely to pick up to 7.8 percent in fiscal 2016-17 from 7.6 percent this year, largely driven by higher discretionary demand. Besides, support came in with the Revenue Secretary Hashmukh Adhia’s statement that the Budget has attempted to make domestic industry competitive, fuel demand and create jobs. He added that new cesses and duty hikes may have made cars and garments costlier but Finance Minister Arun Jaitley’s focus in the Budget 2016-17 was job creation and making taxation simpler, not resource mobilization. Meanwhile, Shares of real estate companies ended higher for the second straight trading sessions after the Union Budget presented by Finance Minister Arun Jaitley on Monday had assigned special thrust to rural India, infrastructure, real estate and the housing sector. After getting gap up opening, Indian equity benchmark continued to trade in tight range throughout session and ended with the massive gains of over 146 points.

On the global front, Asian markets ended higher, after signs of improvement in the U.S. economy helped restore investor confidence and ease jitters about weak global growth. European markets were trading in green in early noon deals, with France’s CAC was up by 0.22%, UK’s FTSE 100 was up by 0.09% and Germany’s DAX was up by 0.06%.

The top gainers from the F&O segment were State Bank of India, NCC and Strides Shasun. On the other hand, the top losers were Mahindra & Mahindra, United Spirits and Sun Pharmaceuticals Industries. In the index options segment, maximum OI was being seen in the 7000-8000 calls and 6300-7300 puts. In today's session, while the traders preferred to exit 6800 put, heavy buildup was seen in the 7300 put. On the other hand, traders exited from 7300 Call, while 7600 call witnessed considerable OI addition. 

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 1.70% and reached 18.99. The 50-share Nifty was up by 146.55 points or 2.03% to settle at 7,368.85.   

Nifty March 2016 futures closed 7361.55 on Wednesday at a discount of 7.30 points over spot closing of 7,368.85, while Nifty April 2016 futures ended at 7388.40 at a premium of 19.55 points over spot closing. Nifty March futures saw addition of 1.36 million (mn) units, taking the total outstanding open interest (OI) to 19.94 million (mn) units. The near month derivatives contract will expire on March 31, 2016.                    

From the most active contracts, SBI March 2016 futures traded at a discount of 1.75 points at 180.65 compared with spot closing of 182.40. The number of contracts traded were 48,265.                      

ICICI Bank March 2016 futures traded at a discount of 1.40 points at 219.10 compared with spot closing of 220.50. The number of contracts traded were 35,617.            

Bank of Baroda March 2016 futures traded at a premium of 0.60 points at 145.40 compared with spot closing of 144.80. The number of contracts traded were 17,626.                

Axis Bank March 2016 futures traded at a premium of 2.20 points at 409.20 compared with spot closing of 407.00. The number of contracts traded were 23,434.       

ITC March 2016 futures traded at a premium of 1.50 points at 321.00 compared with spot closing of 319.50. The number of contracts traded were 13,632.          

Among Nifty calls, 7500 SP from the March month expiry was the most active call with an addition of 0.14 million open interests. Among Nifty puts, 7000 SP from the March month expiry was the most active put with an addition of 0.53 million open interests. The maximum OI outstanding for Calls was at 7500 SP (5.02 mn) and that for Puts was at 7000 SP (6.60 mn). The respective Support and Resistance levels of Nifty are: Resistance 7396.75 --- Pivot Point 7352.45 --- Support --- 7324.55.            

The Nifty Put Call Ratio (PCR) finally stood at 1.04 for March month contract. The top five scrips with highest PCR on OI were Divis Laboratories (3.38), Indian Overseas Bank (3.17), Granules India (2.45), Gail India (1.79) and Indo Count Industries (1.70).  

Among most active underlying, State Bank of India witnessed a contraction of 2.56 million of Open Interest in the March month futures contract, followed by ICICI Bank witnessing a contraction of 3.29 million of Open Interest in the March month contract; Reliance Industries witnessed an addition of 0.18 million of Open Interest in the March month contract, Axis Bank witnessed an addition of 0.28 million of Open Interest in the March month contract and ITC witnessed a contraction of 0.45 million units of Open Interest in the March month's future contract.