Nifty ends higher above 7,700 level on Monday

Domestic equity index - Nifty - ended higher over one percent on Monday on account of hectic buying by fund and retail investors in the blue chips counters. Sentiment got boost as investors hope that the Reserve Bank of India (RBI) will go for a rate cut as much as 50 basis points next month on April 5 after the government slashed small savings scheme rate last week.  Meanwhile, Finance Minister Arun Jaitley said that to make economy more efficient rather than sluggish, the country has to move towards lower interest rates in both deposit and lending rates.  On the global front, Asian markets ended mixed as a retreat in oil prices made investors cautious, but losses were tempered by hopes that China may soon cut interest rates again as pressure on the yuan eases. However, European markets were trading firm with all the major indices trading higher 0.20% each.

Back home, after getting a positive start, Nifty continued to trade range bound for the most part of day. Through, sharp buying which was witnessed in the last leg of trade that helped the market to reclaim 7,700 mark. Finally, Nifty ended with gains of around 100 points.      

The top gainers from the F&O segment were L&T Finance Holdings, Bharat Electronics and TVS Motor Company. On the other hand, the top losers were Asian Paints, Lupin and Bharat Heavy Electricals. In the index options segment, maximum OI was being seen in the 7200-8000 calls and 6500-7700 puts. In today's session, while the traders preferred to exit 7400 put, heavy buildup was seen in the 7600 put. On the other hand, traders exited from 7600 Call, while 7800 call witnessed considerable OI addition.  

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 0.31% and reached 16.33. The 50-share Nifty was up by 99.90 points or 1.31% to settle at 7,704.25.   

Nifty March 2016 futures closed 7713.35 on Monday at a premium of 9.10 points over spot closing of 7,704.25, while Nifty April 2016 futures ended at 7750.80 at a premium of 46.55 points over spot closing. Nifty March futures saw contraction of 0.75 million (mn) units, taking the total outstanding open interest (OI) to 21.50 million (mn) units. The near month derivatives contract will expire on March 31, 2016.                         

From the most active contracts, ICICI Bank March 2016 futures traded at a premium of 0.10 points at 235.05 compared with spot closing of 234.95. The number of contracts traded were 14,458.        

SBI March 2016 futures traded at a discount of 0.70 points at 196.30 compared with spot closing of 197.00. The number of contracts traded were 22,899.         

Ashok Leyland March 2016 futures traded at a premium of 0.10 points at 103.20 compared with spot closing of 103.10. The number of contracts traded were 11,810.                 

Axis Bank March 2016 futures traded at a discount of 0.40 points at 444.50 compared with spot closing of 444.90. The number of contracts traded were 15,871.                 

Tata Steel March 2016 futures traded at a discount of 0.55 points at 303.50 compared with spot closing of 304.05. The number of contracts traded were 8,908. 

Among Nifty calls, 7700 SP from the March month expiry was the most active call with a contraction of 0.93 million open interests. Among Nifty puts, 7600 SP from the March month expiry was the most active put with an addition of 2.70 million open interests. The maximum OI outstanding for Calls was at 7700 SP (5.95 mn) and that for Puts was at 7400 SP (5.67 mn). The respective Support and Resistance levels of Nifty are: Resistance 7739.30 --- Pivot Point 7678.50 --- Support --- 7643.45.            

The Nifty Put Call Ratio (PCR) finally stood at 1.31 for March month contract. The top five scrips with highest PCR on OI were Indian Overseas Bank (2.12), Mcleod Russel India (2.03), Divis Laboratories (1.89) Ultratech Cement (1.87) and Ambuja Cement (1.69).  

Among most active underlying, Lupin witnessed an addition of 0.58 million of Open Interest in the March month futures contract, followed by State Bank of India witnessing an addition of 1.29 million of Open Interest in the March month contract; Tata Steel witnessed an addition of 0.72 million of Open Interest in the March month contract, Reliance Industries witnessed a contraction of 0.32 million of Open Interest in the March month contract and Maruti Suzuki India witnessed a contraction of 0.07 million units of Open Interest in the March month's future contract.