Nifty ends above 7,900 mark on Thursday

After showing distressing performance in last session, Indian benchmark Nifty showed some realization on Thursday and ended the session tad above its crucial 7900 mark. Today’s session was more like roller coaster ride, where the index started the session on promising note and surged around a percent in early trade, but the sentiments turned cynical in late morning trades and index started drifting lower, however the index restarted its northward journey in the late afternoon trade and finished the day gaining over half a percent. Investors got some confidence with UN report stating that India is expected to achieve a 7.5 per cent GDP growth in 2017 and the economic prospects of the South Asian region will be contingent on the growth trajectory of India and Iran. Some support also came with the report that the prospects of a good monsoon have improved as the crucial weather system is likely to hit the Kerala coast on the normal date of June 1, while the risk of a lingering El Nino, which disrupts rainfall in the region, has been eliminated by favourable changes in ocean temperatures. 

Global cues remained mixed with European counters making mostly a positive start, while Asian markets ended mostly in negative territory following a dismal day on Wall Street, while the dollar took a breather from this week’s rebound and crude oil gave back some of its recent gains. Back home, buying was witnessed across the board as not a single NSE sectoral index ended in negative territory. Strong buying was seen in banking stocks after the Rajya Sabha passed the Insolvency and Bankruptcy code Bill, enabling a single law to deal with distressed companies, their promoters, creditors, employees and other stake holders for the first time in India. Besides, depreciation in rupee value against the dollar, gave some comfort to information technology (IT) stocks, who earn most of their revenues in dollars.

The top gainers from the F&O segment were Housing Development and Infrastructure, Indiabulls Housing Finance and Dewan Housing Finance Corporation. On the other hand, the top losers were SRF, Syndicate Bank and UCO Bank. In the index options segment, maximum OI was being seen in the 7800-8500 calls and 7000-7900 puts. In today's session, while the traders preferred to exit 7600 put, heavy buildup was seen in the 7900 put. On the other hand, traders exited from 8600 Call, while 8100 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 3.74% and reached 16.32. The 50-share Nifty was up by 51.55 points or 0.66% to settle at 7,900.40.   

Nifty May 2016 futures closed at 7928.20 on Thursday’s at a premium of 27.80 points over spot closing of 7,900.40, while Nifty June 2016 futures ended at 7939.00 at a premium of 38.60 points over spot closing. Nifty May futures saw addition of 0.32 million (mn) units, taking the total outstanding open interest (OI) to 17.04 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 discount of 0.50 points at 188.30 compared with spot closing of 188.80. The number of contracts traded were 18,440.                

ICICI Bank May 2016 futures traded at a premium of 0.15 points at 233.00 compared with spot closing of 232.85. The number of contracts traded were 23,640.          

Axis Bank  May 2016 futures traded at a premium of 0.90 points at 494.90 compared with spot closing of 494.00. The number of contracts traded were 20,340. 

Tata Motors May 2016 futures traded at a premium of 0.50 points at 387.50 compared with spot closing of 387.00. The number of contracts traded were 9,576.                

Reliance Industries May 2016 futures traded at a premium of 1.05 points at 994.05 compared with spot closing of 993.00. The number of contracts traded were 18,029.        

Among Nifty calls, 8000 SP from the May month expiry was the most active call with an addition of 0.03 million open interests. Among Nifty puts, 7800 SP from the May month expiry was the most active put with an addition of 0.71 million open interests. The maximum OI outstanding for Calls was at 8000 SP (6.57 mn) and that for Puts was at 7700 SP (5.71 mn). The respective Support and Resistance levels of Nifty are: Resistance 7927.75 --- Pivot Point 7888.70 --- Support --- 7861.35.             

The Nifty Put Call Ratio (PCR) finally stood at 0.96 for May month contract. The top five scrips with highest PCR on OI were Indian Overseas Bank (2.64), Indusind Bank (1.44), Axis Bank (1.21), Indiabulls Real Estates (1.15) and United Breweries (1.14).  

Among most active underlying, Dr. Reddy's Laboratories witnessed a contraction of 0.07 million of Open Interest in the May month futures contract, followed ICICI Bank witnessing an addition of 2.86 million of Open Interest in the May month contract; Reliance Industries witnessed a contraction of 0.47 million of Open Interest in the May month contract, Axis Bank witnessed a addition of 0.40 million of Open Interest in the May month contract and State Bank of India witnessed a contraction of 1.91 million units of Open Interest in the May month's future contract.