Nifty snaps 3-day losing streak on Thursday

The benchmark index -- Nifty has ended higher on Thursday, on account of value buying by funds and retail investors in the beaten down blue but fundamentally strong stocks. Investors’ sentiment remained up-beat with Finance Minister -- Arun Jaitley’s statement that the India is already the fastest growing major economy in the world and can grow at an even faster pace this year if predictions of good monsoon hold up.  Further, support also came in on report that the government of India is considering setting up an independent panel to help state-owned banks negotiate settlements with big businesses on bad loans, in order to shield bankers from a populist backlash they say is hobbling efforts to clean up their balance sheets. However, gain remained capped with a private report stating that government must focus on structural reforms to put the country on the path of faster economic growth, as the ‘several reforms’ implemented so far may not be enough in a fast-changing world. 

On the global front, Asian markets ended mostly in red, for the seventh consecutive trading session after a mixed set of US economic data failed to enthuse the investors, barring China’s Shanghai Composite. However, European stock markets steadied, buoyed by encouraging earning updates by firms including telecoms group BT and oil company Repsol.

Back Home, After making positive opening, Market continued to trade in tight range for the fast half of the session and extended its gain to recuperate its psychological 7,750 mark in late afternoon session, but some final hour profit booking ensured that the key index shut shops off the intraday high. Finally Nifty ended with gains of over 28 points. The top gainers from the F&O segment were Castrol India, Indiabulls Real Estate and United Spirits. On the other hand, the top losers were Idea Cellular, Adani Ports and Special Economic Zone and Container Corporation of India. In the index options segment, maximum OI was being seen in the 7800-8500 calls and 7000-7800 puts. In today's session, while the traders preferred to exit 7900 put, heavy buildup was seen in the 7700 put. On the other hand, traders exited from 8000 Call, while 7900 call witnessed considerable OI addition.   

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.57% and reached 17.17. The 50-share Nifty was up by 28.95 points or 0.38% to settle at 7,735.50.   

Nifty May 2016 futures closed at 7773.10 on Thursday at a premium of 37.60 points over spot closing of 7,735.50, while Nifty June 2016 futures ended at 7786.90 at a premium of 51.40 points over spot closing.  Nifty May futures saw contraction of 0.93 million (mn) units, taking the total outstanding open interest (OI) to 18.25 million (mn) units. The near month derivatives contract will expire on May 26, 2016.                         

From the most active contracts, SBI May 2016 futures traded at a premium of 0.20 points at 180.85 compared with spot closing of 180.65. The number of contracts traded were 19,016.                

ICICI Bank May 2016 futures traded at a premium of 1.55 points at 216.05 compared with spot closing of 214.50. The number of contracts traded were 17,542.          

Axis Bank May 2016 futures traded at a premium of 2.55 points at 463.90 compared with spot closing of 461.35. The number of contracts traded were 14,305. 

Tata Steel May 2016 futures traded at a premium of 1.00 points at 334.00 compared with spot closing of 333.00. The number of contracts traded were 14,237.                

Tata Motors May 2016 futures traded at a premium of 1.90 points at 391.60 compared with spot closing of 389.70. The number of contracts traded were 13,350. 

Among Nifty calls, 7800 SP from the May month expiry was the most active call with an addition of 0.25 million open interests. Among Nifty puts, 7700 SP from the May month expiry was the most active put with an addition of 0.31 million open interests. The maximum OI outstanding for Calls was at 8100 SP (5.41 mn) and that for Puts was at 7700 SP (4.37 mn). The respective Support and Resistance levels of Nifty are: Resistance 7773.08 --- Pivot Point 7739.97 --- Support --- 7702.38.             

The Nifty Put Call Ratio (PCR) finally stood at 0.79 for May month contract. The top five scrips with highest PCR on OI were Indian Overseas Bank (1.89), KPIT Technologies (1.76), Indusind Bank (1.20), Container Corporation of India (1.18) and Hexaware Technologies (1.15).  

Among most active underlying, Tata Steel witnessed an addition of 1.30 million of Open Interest in the May month futures contract, followed Yes Bank witnessing an addition of 0.54 million of Open Interest in the May month contract; Housing Development Finance Corporation witnessed a contraction of 0.25 million of Open Interest in the May month contract, State Bank of India witnessed a contraction of 0.25 million of Open Interest in the May month contract and ICICI Bank witnessed an addition of 1.42 million units of Open Interest in the May month's future contract.