Firm global cues take Nifty above 8200 mark

Nifty ended the penultimate session of the F&O series expiry with a gain of around a percent amid firm global cues. Sentiments remained up-beat after the government asserted it has ‘enough’ support for passage of the GST bill in the Monsoon session of Parliament that will commence from July 18 till August 12. Further, emphasizing the GST Bill is in the larger interest of the country, Naidu has said, government has a wider support and enough numbers for GST but government would like to have all parties on board because it will have an effect on states. Traders took some encouragement with the Economic Affairs Secretary Shaktikanta Das’ statement that the India is posed for a ‘big leap’ in growth which could touch 8 per cent in the current fiscal on the back of normal monsoon. Additional support came after cabinet cleared a big pay hike for over a crore government employees and pensioners. The Seventh Pay Commission had recommended 23.55% overall hike in salaries, allowances and pension for government employees. Meanwhile, the cabinet has approved the National Mineral Exploration Policy (NMEP) on Wednesday, which will pave the way for auction of 100 prospective mineral blocks, boosting India’s mining potential. It also cleared the model Shops and Establishment Act that would allow cinema halls, restaurants, shops, banks and other such workplaces to be open 24X7.

On the global front, Asian markets rallied on hopes that authorities will unveil fresh stimulus to counter the effects of Britain's shock vote to leave the European Union. European stocks continue their rally on Wednesday, as global markets realize that any change to the status quo in the European Union (EU) after the Brexit vote is unlikely to change in the short-term.

Back home, after making gap up opening Indian equity benchmark traded with traction, but in narrow range. Markets extended its gains in second half of trade to reach intraday high, recapturing its crucial 8,200 mark. Finally, Nifty ended the session with the gains of over 75 points. The top gainers from the F&O segment were Unitech, DLF and The India Cements. On the other hand, the top losers were Dabur India, LIC Housing Finance and Hexaware Technologies. In the index options segment, maximum OI was being seen in the 8100-8500 calls and 7000-8200 puts. In today's session, while the traders preferred to exit 7700 put, heavy buildup was seen in the 8150 put. On the other hand, traders exited from 8100 Call, while 8500 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 8.85% and reached 16.15. The 50-share Nifty was up by 76.15 points or 0.94% to settle at 8,204.00.    

Nifty June 2016 futures closed at 8204.50 on Wednesday at a premium of 0.50 points over spot closing of 8,204.00, while Nifty July 2016 futures ended at 8236.65 at a premium of 32.65 points over spot closing.  Nifty June futures saw contraction of 2.56 million (mn) units, taking the total outstanding open interest (OI) to 8.20 million (mn) units. The near month derivatives contract will expire on June 30, 2016.                               

From the most active contracts, State Bank of India June 2016 futures traded at a premium of 0.60 points at 217.90 compared with spot closing of 217.30. The number of contracts traded were 28,611. 

Tata Motors June 2016 futures traded at a premium of 0.65 points at 441.65 compared with spot closing of 441.00. The number of contracts traded were 17,712.                   

Tata Steel June 2016 futures traded at a premium of 1.10 points at 314.00 compared with spot closing of 312.90. The number of contracts traded were 12,620.            

HDFC Bank June 2016 futures traded at a discount of 8.05 points at 1161.25 compared with spot closing of 1,169.30. The number of contracts traded were 17,335.  

Maruti Suzuki India June 2016 futures traded at a premium of 12.80 points at 4135.55 compared with spot closing of 4,122.75. The number of contracts traded were 13,560.         

Among Nifty calls, 8200 SP from the June month expiry was the most active call with a contraction of 1.05million open interests. Among Nifty puts, 8100 SP from the June month expiry was the most active put with an addition of 1.42 million open interests. The maximum OI outstanding for Calls was at 8300 SP (7.33 mn) and that for Puts was at 8000 SP (7.38 mn). The respective Support and Resistance levels of Nifty are: Resistance 8225.05 --- Pivot Point 8191.35 --- Support --- 8170.30.             

The Nifty Put Call Ratio (PCR) finally stood at 1.35 for June month contract. The top five scrips with highest PCR on OI were Indusind Bank (1.66), Container of Corporation of India (1.56), Hindalco (1.33), United Breweries (1.30) and Apollo Hospital (1.22).  

 Among most active underlying, State Bank of India witnessed a contraction of 11.92 million of Open Interest in the June month futures contract, followed Tata Motors  witnessing a contraction of 6.35 million of Open Interest in the June month contract; HDFC Bank witnessed a contraction of 6.19 million of Open Interest in the June month contract, Yes Bank witnessed a contraction of 2.06 million of Open Interest in the June month contract and Maruti Suzuki India witnessed a contraction of 0.55 million units of Open Interest in the June month's future contract.