Nifty ends higher for 2nd consecutive days amid firm global cues

Benchmark index -- Nifty has closed higher with gain of over quarter a per cent amid strong global cues. Investors' sentiment remained upbeat with Finance Minister Arun Jaitley exuding confidence in getting the GST Bill passed in the upcoming monsoon session. Jaitley has said that he has spoken to the chief ministers of all states, including those ruled by the UPA and the Congress, and they are a “strong supporter” of the idea. Further, support also came in with Economic affairs secretary Shaktikanta Das stating that the India’s pace of economic expansion is likely to exceed the government’s initial projection this year, accelerating to about 8% if the country receives normal levels of seasonal rainfall. Besides, buying in oil marketing companies’ shares too supported sentiments after increasing prices of petrol by 83 paise per liter and dieael rates by Rs 1.26 per liter in order to align the domestic rates of the automobile fuels with global prices.

On the global front, Asian markets ended mostly higher, as tech firms were boosted by news of Warren Buffett's billion-dollar stake in Apple and energy stocks tracked further gains in oil prices.  Europeans markets were trading higher, with companies such as Taylor Wimpey and Vodafone gaining after their encouraging updates and miners tracking a rally in major industrial metals.

Back home, after making a gap up opening, domestic equity index has extended its initial gains and continued to trade with traction for the most part of day’s trade but market participants took some profit off the table at higher level in the last leg of trade to end the session with the gains of 30 points. The top gainers from the F&O segment were Sun TV Network, Motherson Sumi Systems and Syndicate Bank. On the other hand, the top losers were Eicher Motors, NTPC and Aurobindo Pharma. 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 7100 put, heavy buildup was seen in the 7900 put. On the other hand, traders exited from 7800 Call, while 8050 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 3.87% and reached 16.37. The 50-share Nifty was up by 30.00 points or 0.38% to settle at 7,890.75.   

Nifty May 2016 futures closed at 7907.60 on Tuesday at a premium of 16.85 points over spot closing of 7,890.75, while Nifty June 2016 futures ended at 7917.10 at a premium of 26.35 points over spot closing.  Nifty May futures saw addition of 0.40 million (mn) units, taking the total outstanding open interest (OI) to 16.60 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 0.40 points at 177.50 compared with spot closing of 177.10. The number of contracts traded were 21,928.                

Bank of Baroda May 2016 futures traded at a premium of 0.35 points at 142.00 compared with spot closing of 141.65. The number of contracts traded were 11,744.          

ICICI Bank May 2016 futures traded at a premium of 0.80 points at 226.65 compared with spot closing of 225.85. The number of contracts traded were 13,970.  

Reliance Industries May 2016 futures traded at a premium of 5.85 points at 973.30 compared with spot closing of 967.45. The number of contracts traded were 13,060.                

Axis Bank May 2016 futures traded at a premium of 0.25 points at 503.00 compared with spot closing of 502.75. The number of contracts traded were 20,942. 

Among Nifty calls, 8000 SP from the May month expiry was the most active call with a contraction of 0.36 million open interests. Among Nifty puts, 7900 SP from the May month expiry was the most active put with an addition of 1.52 million open interests. The maximum OI outstanding for Calls was at 8000 SP (7.92 mn) and that for Puts was at 7800 SP (6.04 mn). The respective Support and Resistance levels of Nifty are: Resistance 7927.33 --- Pivot Point 7903.52 --- Support --- 7866.93.             

The Nifty Put Call Ratio (PCR) finally stood at 0.94 for May month contract. The top five scrips with highest PCR on OI were Syndicate Bank (1.49), Indusind Bank (1.46), Axis Bank (1.35), UCO Bank (1.14) and Zee Entertainment (1.11).  

Among most active underlying, Yes Bank witnessed a contraction of 0.30 million of Open Interest in the May month futures contract, followed State Bank of India witnessing a contraction of 1.14 million of Open Interest in the May month contract; Motherson Sumi Systems witnessed an addition of 1.74 million of Open Interest in the May month contract, Axis Bank witnessed a contraction of 0.80 million of Open Interest in the May month contract and Maruti Suzuki India witnessed a contraction of 0.14 million units of Open Interest in the May month's future contract.