Nifty ends above 8,250 level on F&O expiry day

The fifty stock index -- Nifty ended higher over a percent on Thursday on account of firm global cues as Brexit fears are slowly subsiding. Investors’ sentiment got some boost after the government cleared the recommendations of the 7th Pay Commission according to which the overall hike in salary and allowance of central government employees and pensioners comes to 23.5%. Sentiment remained upbeat with Parliamentary Affairs Minister Venkaiah Naidu’s statement that the government will seek to ensure that Goods and Services Tax (GST) Bill will be passed in the upcoming session of Parliament, scheduled from July 18 to August 12. Market participants also cheered Finance Minister Arun Jaitley’s statement that the Non Performing Assets (NPA) situation is under control as the economic conditions are showing signs of improvement. Moreover, some support also came with the Indian Meteorlogical Department (IMD) report that monsoon rainfall remains strong & will retain its momentum in the days ahead. It is likely to cover Delhi, Punjab, Haryana and Rajasthan in the next three days.

On the global front, Asian markets ended mostly higher, tracking an overnight rally on Wall Street, while the safe-haven Japanese yen was held in check as global markets regained a semblance of calm after the Brexit shock. Following above tandem, European markets climbed on Thursday, with France’s CAC was up by 0.72%, UK’s FTSE 100 was up by 0.46% and Germany’s DAX was up by 0.27%.

Back home, after getting a gap-up start market traded with traction and market extended its gains in second half of trade to reach intraday highs, to end near its crucial 8,300 mark. Finally, Nifty ended the session with gains of over 80 points. The top gainers from the F&O segment were Jaiprakash Associates, GMR Infrastructure and Jubilant Foodworks. On the other hand, the top losers were Godrej Industries, CEAT and MRF. In the index options segment, maximum OI was being seen in the 8000-8700 calls and 7000-8250 puts. In today's session, while the traders preferred to exit 8100 put, heavy buildup was seen in the 8250 put. On the other hand, traders exited from 8200 Call, while 8350 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 0.83% and reached 16.29. The 50-share Nifty was up by 83.75 points or 1.02% to settle at 8,287.75.    

Nifty July 2016 futures closed at 8321.05 on Thursday at a premium of 33.30 points over spot closing of 8,287.75, while Nifty August 2016 futures ended at 8350.45 at a premium of 62.70 points over spot closing. Nifty July futures saw addition of 6.93 million (mn) units, taking the total outstanding open interest (OI) to 18.42 million (mn) units. The near month derivatives contract will expire on July 28, 2016.                               

From the most active contracts, State Bank of India July 2016 futures traded at a discount of 0.05 points at 219.25 compared with spot closing of 219.30. The number of contracts traded were 20,475.  

HDFC Bank July 2016 futures traded at a premium of 11.10 points at 1184.70 compared with spot closing of 1173.60. The number of contracts traded were 18,752.                   

Reliance Industries July 2016 futures traded at a premium of 7.65 points at 976.65 compared with spot closing of 969.00. The number of contracts traded were 21,579.            

Sun Pharmaceuticals Industries July 2016 futures traded at a premium of 4.75 points at 769.25 compared with spot closing of 764.50. The number of contracts traded were 17,434.  

Among Nifty calls, 8300 SP from the June month expiry was the most active call with an addition of 2.06 million open interests. Among Nifty puts, 8200 SP from the June month expiry was the most active put with an addition of 3.07 million open interests. The maximum OI outstanding for Calls was at 8300 SP (10.18 mn) and that for Puts was at 8200 SP (6.93 mn). The respective Support and Resistance levels of Nifty are: Resistance 8316.57 --- Pivot Point 8279.33 --- Support --- 8250.52.             

The Nifty Put Call Ratio (PCR) finally stood at 1.52 for June month contract. The top five scrips with highest PCR on OI were South Indian Bank (16.22), Indusind Bank (2.03), Boach (2.00), UCO Bank (1.99) and Dr reddy (1.86).   

Among most active underlying, State Bank of India witnessed an addition of 12.08 million of Open Interest in the June month futures contract, followed Tata Motors  witnessing a contraction of 5.10 million of Open Interest in the June month contract; Yes Bank witnessed a contraction of 1.63 million of Open Interest in the June month contract, Axis Bank witnessed an addition of 6.30 million of Open Interest in the June month contract and Reliance Industries witnessed a contraction of 5.04 million units of Open Interest in the June month's future contract.