Nifty ends above 7,000 level amid firm global cues

The fifty stock index -- Nifty -- ended higher on Wednesday on account of sustained buying by fund and retail investors amid firm global cues, as the US Federal Reserve chair, Janet Yellen, maintained a cautious tone regarding interest rate hikes. Further, Sentiments got boost with Finance Minister’s statement that he will reach out to the Congress again to persuade it to support the much delayed GST bill in second half of the Budget Session beginning next month. Besides, buying in steel stocks too aided the sentiment, as government announced an extension of safeguard duty of up to 20 per cent on certain steel products till March 2018, a move seen as a bid by the policymakers to guard the domestic industry against cheaper imports from China. On the global front, Asian markets ended mostly in green, tracking the climb of U.S. shares as investors welcomed the latest signal from the Federal Reserve that it will move slowly to raise interest rates. European indices continued to trade with gains in early deals on Wednesday, supported by growing oil prices and significant gains in the energy and mining sector.

Back home, after getting a gap up opening, Nifty extended its gain and continued to trade with traction through the session and ended with gain of over 138 points. The top gainers from the F&O segment were Adani Power, DLF and MindTree. On the other hand, the top losers were Bharti Infratel, Kaveri Seed Company and Colgate Palmolive (India). In the index options segment, maximum OI was being seen in the 7500-8000 calls and 6500-7700 puts. In today's session, while the traders preferred to exit 7400 put, heavy buildup was seen in the 7700 put. On the other hand, traders exited from 7700 Call, while 7750 call witnessed considerable OI addition.  

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 4.71% and reached 16.80. The 50-share Nifty was up by 138.20 points or 1.82% to settle at 7,735.20.   

Nifty March 2016 futures closed 7741.00 on Wednesday at a premium of 5.80 points over spot closing of 7,735.20, while Nifty April 2016 futures ended at 7783.35 at a premium of 48.15 points over spot closing. Nifty March futures saw contraction of 1.55 million (mn) units, taking the total outstanding open interest (OI) to 14.46 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 premium of 0.80 points at 197.85 compared with spot closing of 197.05. The number of contracts traded were 29,508.        

ICICI Bank March 2016 futures traded at a discount of 0.30 points at 237.60 compared with spot closing of 237.90. The number of contracts traded were 25,583.                         

Axis Bank March 2016 futures traded at a premium of 0.15 points at 444.15 compared with spot closing of 444.00. The number of contracts traded were 17,405.                                                      

Tata Steel March 2016 futures traded at a premium of 1.10 points at 324.60 compared with spot closing of 323.50. The number of contracts traded were 23,250. 

HDFC Bank March 2016 futures traded at a discount of 0.25 points at 1066.05 compared with spot closing of 1,066.30. The number of contracts traded were 19,279.

Among Nifty calls, 7700 SP from the March month expiry was the most active call with a contraction of 0.21 million open interests. Among Nifty puts, 7600 SP from the March month expiry was the most active put with an addition of 0.44 million open interests. The maximum OI outstanding for Calls was at 7800 SP (6.02 mn) and that for Puts was at 7600 SP (5.60 mn). The respective Support and Resistance levels of Nifty are: Resistance 7770.28 --- Pivot Point 7706.87 --- Support --- 7671.78.            

The Nifty Put Call Ratio (PCR) finally stood at 1.47 for March month contract. The top five scrips with highest PCR on OI were Bata India (2.71), Ajanta Pharma (2.58), Divis Laboratories (2.57), Indian Overseas Bank (2.08) and United Breweries (2.00).  

Among most active underlying, Tata Steel witnessed a contraction of 4.89 million of Open Interest in the March month futures contract, followed by Lupin witnessing a contraction of 1.40 million of Open Interest in the March month contract; State Bank of India witnessed a contraction of 9.15 million of Open Interest in the March month contract, ICICI Bank witnessed a contraction of 13.58 million of Open Interest in the March month contract and Reliance Industries witnessed a contraction of 3.17 million units of Open Interest in the March month's future contract.