Nifty ends above 7,850 mark on good monsoon forecast

Domestic equity index -- Nifty -- ended higher with gain of around two per cent on Wednesday on account of sustained buying by investors in the blue chip counters amid firm global cues, as rally in commodity and crude oil prices on reports of an Russia-Saudi Arabia agreement to freeze output. Sentiment was upbeat with the India Meteorological Department’s (IMD) forecast of above-normal rainfall this monsoon, with rainfall activity likely to be 106 per cent of long period average (LPA). Further, support also came in with the International Monetary Fund’s latest World Economic Outlook report, which despite cutting global growth forecast has said that India's growth is projected to notch up to 7.5 percent in 2016-17, overtaking China's GDP by more than 1 percent, mainly driven by private consumption and increased industrial activity. On the global front, Asian markets ended higher on Wednesday, following strong Chinese trade data raised hopes that the economy is stabilizing. European markets were trading higher across the board, with France’s CAC was up by 2.49%, Germany’s DAX was up by 2.24% and UK’s FTSE was up by 1.44%. 

Back home, after making a gap-up opening, Indian equity benchmark has extended its gain and continued to trade with traction throughout the session. Finally, Nifty ended with gain of over 140 points. The top gainers from the F&O segment were Mahindra & Mahindra, Tata Chemicals and Dewan Housing Finance Corporation. On the other hand, the top losers were Marico, PC Jeweller and Ashok Leyland. In the index options segment, maximum OI was being seen in the 7600-8200 calls and 7000-7800 puts. In today's session, while the traders preferred to exit 7500 put, heavy buildup was seen in the 7800 put. On the other hand, traders exited from 7700 Call, while 8100 call witnessed considerable OI addition.   

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 0.06% and reached 16.03. The 50-share Nifty was up by 141.50 points or 1.84% to settle at 7,850.45.   

Nifty April 2016 futures closed 7867.85 on Wednesday at a premium of 17.40 points over spot closing of 7,850.45, while Nifty May 2016 futures ended at 7902.55 at a premium of 52.10 points over spot closing.  Nifty April futures saw addition of 1.34 million (mn) units, taking the total outstanding open interest (OI) to 16.21 million (mn) units. The near month derivatives contract will expire on April 28, 2016.                         

From the most active contracts, SBI April 2016 futures traded at a premium of 1.05 points at 192.45 compared with spot closing of 191.40. The number of contracts traded were 20,559.        

ICICI Bank April 2016 futures traded at a premium of 1.45 points at 241.55 compared with spot closing of 240.10. The number of contracts traded were 24,389.                          

Axis Bank April 2016 futures traded at a premium of 2.95 points at 442.15 compared with spot closing of 439.20. The number of contracts traded were 13,800.                                                      

Tata Motors April 2016 futures traded at a premium of 1.20 points at 409.00 compared with spot closing of 408.80. The number of contracts traded were 13,223.   

Tata Steel April 2016 futures traded at a premium of 0.70 points at 333.10 compared with spot closing of 332.40. The number of contracts traded were 17,661.  

Among Nifty calls, 7900 SP from the March month expiry was the most active call with an addition of 0.74 million open interests. Among Nifty puts, 7800 SP from the March month expiry was the most active put with an addition of 2.56 million open interests. The maximum OI outstanding for Calls was at 8000 SP (7.23 mn) and that for Puts was at 7000 SP (5.01 mn). The respective Support and Resistance levels of Nifty are: Resistance 7886.10 --- Pivot Point 7829.15 --- Support --- 7793.50.            

The Nifty Put Call Ratio (PCR) finally stood at 1.10 for March month contract. The top five scrips with highest PCR on OI were Bajaj Finance (1.87), Hero MotoCorp (1.48), CESC (1.43), United Breweries (1.38) and Castrol India (1.28).  

Among most active underlying, Infosys witnessed an addition of 1.30 million of Open Interest in the March month futures contract, followed by Tata Steel witnessing a contraction of 0.02 million of Open Interest in the March month contract; Maruti Suzuki India witnessed a contraction of 0.13 million of Open Interest in the March month contract, State Bank of India witnessed a contraction of 1.23 million of Open Interest in the March month contract and Reliance Industries witnessed an addition of 0.32 million units of Open Interest in the March month's future contract.