Nifty makes triple digit gains; closes above 8400 level

Nifty surged with triple digit gains on Monday, as the benchmark, after a positive start continued its strong momentum till the end of the session. There was broad based buying in front line blue chip counters taking positive cues from global counterparts as stronger-than-expected US jobs report suggested that the world's biggest economy was back on track. Sentiments also remained upbeat as the India Meteorological Department (IMD) reported that around 89 percent of the country has received normal and excess rainfall, owing to a good amount of monsoon in several parts, while large parts of Gujarat have recorded deficiency of more than half.  Some support also came with NITI Aayog Vice Chairman Arvind Panagariya’s statement that the government has put the economy on the path of reform to achieve a high growth trajectory though there are significant lags between policy decisions and outcomes which need to be addressed.

On global front, Asian equity markets advanced on Monday, after strong US monthly jobs data reassured investors about the health of the world’s largest economy. The US Labor Department's jobs report said non-farm payroll employment surged up by 287,000 jobs in June versus economist estimates for an increase of about 180,000 jobs. Further, European equities extended a rebound into a third day as optimism over prospects for global growth and stimulus in Japan lifted investor sentiment.

Back home, all the NSE sectoral indices posted good gains, led by finance, auto, realty and banking.  shares of Auto companies gained after sales of passenger vehicles in June grew for the 12th straight month, according to data released by the Society of Indian Automobile Manufacturers (SIAM), domestic passenger vehicle sales grew 2.68 percent to 2,23,454 units in June from 2,17,620 units in the same month last year.  Furthermore, rate-sensitive real estate and Banking stocks too rallied on hopes that the central bank in its next policy meet in August will cut interest rate in the wake of the good progress of monsoon. The top gainers from the F&O segment were PNB, Allahabad Bank and Shriram Transport Finance Company. On the other hand, the top losers were Jaiprakash Associates, United Spirits  and UPL. In the index options segment, maximum OI was being seen in the 8200-8800 calls and 7900-8600 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.55% and reached 14.84. The 50-share Nifty was up by 144.70 points or 1.74% to settle at 8,467.90.

Nifty July 2016 futures closed at 8489.40 on Monday  at a premium of 21.50 points over spot closing of 8,467.90, while Nifty August 2016 futures ended at 8524.55 at a premium of 56.65 points over spot closing. Nifty July futures saw addition of 1.67 million (mn) units, taking the total outstanding open interest (OI) to 19.94 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 premium of 1.10 points at 225.60 compared with spot closing of 224.50. The number of contracts traded were 17,906.

Bank of Baroda of July 2016 futures traded at a premium of 0.85 points at 163.10 compared with spot closing of 162.25. The number of contracts traded were 9,750. 

ICICI Bank  July 2016 futures traded at a premium of 1.45 points at 251.15 compared with spot closing of 249.70. The number of contracts traded were 11,258.

Punjab National Bank July 2016 futures traded at a discount of 2.20 points at 126.25 compared with spot closing of 128.45. The number of contracts traded were 12,565.

Tata Motors July 2016 futures traded at a premium of 1.55 points at 485.40 compared with spot closing of 483.85. The number of contracts traded were 11,343.

Among Nifty calls, 8500 SP from the July month expiry was the most active call with a contraction of 0.02 million open interests. Among Nifty puts, 8400 SP from the July month expiry was the most active put with an addition of 2.46 million open interests. The maximum OI outstanding for Calls was at 8700 SP (4.41 mn) and that for Puts was at 8200 SP (4.32 mn). The respective Support and Resistance levels of Nifty are: Resistance 8493.08--- Pivot Point 8450.07--- Support --- 8424.88.  

The Nifty Put Call Ratio (PCR) finally stood at 1.19 for July month contract. The top five scrips with highest PCR on OI were Grasim Industries (1.26), Mindtree(1.18), Vedanta (1.12), HDFC (1.08) and Hero MotoCorp (1.02).  

Among most active underlying IndusInd Bank witnessed an addition of 1.18 million of Open Interest in the July month futures contract, followed State Bank of India witnessing an addition of 2.18 million of Open Interest in the July month contract; Punjab National Bank witnessed a contraction of 1.22 million of Open Interest in the July month contract, Tata Steel witnessed a contraction of 0.60 million of Open Interest in the July month contract and Tata Motors witnessed an addition of 0.46 million units of Open Interest in the July month's future contract.