Nifty ends above 7,850 mark on Monday

Domestic equity index -- Nifty has ended higher with gain of over half a per cent on account of buying by funds and retail investors in the front line blue chips counters. Sentiments got boost with Economic think-tank NCAER projecting India's economic growth rate to improve marginally to 7.7 percent in 2016-17 against the backdrop of IMD's forecast of better monsoon rains this year. Further, support also came in on report that India’s wholesale prices unexpectedly rose for the first time in 18 months in April, ending a period of deflation. India's annual wholesale price inflation (WPI) moved up into the positive zone at 0.34% for April, from (-) 0.85% in March and (-) 2.43% during the corresponding month of the previous year. However, upside remained capped on report that India’s exports dipped by 6.74 percent to $20.5 billion in April on account of sharp fall in shipments of petroleum and engineering products amid tepid global demand.

On the global front, Asian equity markets ended mostly higher on Monday as gains in oil prices and hopes for economic stimulus in Japan helped investors shrug off weak cues from Wall Street and disappointing Chinese data, while European markets were trading in red following weak data out of China.

Back home, after making a positive start, Indian equity benchmark entered into negative terrain and continued to trade in range bound for the most part of the trade. However, buying witnessed in the last leg of trade that helped the market to enter in positive territory. Finally, Nifty ended higher by over 45 points. The top gainers from the F&O segment were Kaveri Seed Company, Indiabulls Real Estate and Ajanta Pharma. On the other hand, the top losers were Bank of Baroda, Union Bank of India and Indo Count Industries. 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 8000 put, heavy buildup was seen in the 7900 put. On the other hand, traders exited from 7800 Call, while 7900 call witnessed considerable OI addition.   

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 0.21% and reached 17.03. The 50-share Nifty was up by 45.85 points or 0.59% to settle at 7,860.75.   

Nifty May 2016 futures closed at 7887.20 on Monday at a premium of 26.45 points over spot closing of 7,860.75, while Nifty June 2016 futures ended at 7896.65 at a premium of 35.90 points over spot closing.  Nifty May futures saw contraction of 0.08 million (mn) units, taking the total outstanding open interest (OI) to 16.19 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 0.30 points at 177.45 compared with spot closing of 177.15. The number of contracts traded were 27,131.                

ICICI Bank May 2016 futures traded at a premium of 0.30 points at 224.75 compared with spot closing of 224.45. The number of contracts traded were 18,153.          

Bank of Baroda May 2016 futures traded at a premium of 0.55 points at 142.60 compared with spot closing of 142.05. The number of contracts traded were 28,457.  

Tata Motors May 2016 futures traded at a premium of 1.80 points at 392.55 compared with spot closing of 390.75. The number of contracts traded were 9,938.                

Reliance Industries May 2016 futures traded at a premium of 5.50 points at 980 compared with spot closing of 974.50. The number of contracts traded were 10,413.  

Among Nifty calls, 7900 SP from the May month expiry was the most active call with an addition of 0.22 million open interests. Among Nifty puts, 7800 SP from the May month expiry was the most active put with an addition of 0.17 million open interests. The maximum OI outstanding for Calls was at 8000 SP (8.29 mn) and that for Puts was at 7700 SP (5.43 mn). The respective Support and Resistance levels of Nifty are: Resistance 7899.05 --- Pivot Point 7835.60--- Support --- 7797.30.             

The Nifty Put Call Ratio (PCR) finally stood at 0.87 for May month contract. The top five scrips with highest PCR on OI were Indusind Bank (1.40), UCO Bank (1.18), Zee Entertainment (1.12), Indian Overseas Bank (1.06) and Indiabulls Real Estate (1.04).   

Among most active underlying, Bank of Baroda witnessed an addition of 0.89 million of Open Interest in the May month futures contract, followed State Bank of India witnessing an addition of 4.66 million of Open Interest in the May month contract; Yes Bank witnessed an addition of 0.17 million of Open Interest in the May month contract, ICICI Bank witnessed a addition of 1.79 million of Open Interest in the May month contract and Axis Bank witnessed a contraction of 1.65 million units of Open Interest in the May month's future contract.