Nifty adds half a percent gain; regains 8550 level

The local benchmark-- Nifty -- traded in green throughout the day and ended higher with a gain of around half a percent on Wednesday, recapturing its crucial 8,550 bastion. After a positive opening, market hold on to its gains and traded in tight band till end of the session, as sentiments got some support with Finance Minister Arun Jaitley’s statement that the GST bill should be passed in the Rajya Sabha as early as possible. He said, the earlier the GST is passed, the better it is for states so that they get a share in the Service Tax” which is not included in the provisions of 14th Finance Commission. Market participants ignored report that International Monetary Fund has trimmed India’s growth forecast for the current and next financial years by 0.1 percentage points as it pared global growth by an identical amount. Positive opening in European counterparts too provided strength to domestic market. However, Asian markets ended mostly in red as investors reassessed the global economy following the International Monetary Bank's global growth cut.

Back home, there was broad based buying witnessed in the market and apart from the blue chips, all the sectoral indices, barring software and media, too participated strongly in the rally. Buying in pharma space too provided support to the market, led by rally in Aurobindo Pharma after the US health regulator gave approval for antihyperlipidemic drug Rosuvastatin calcium tablets. Additionally, shares of cement companies ended higher on the bourses on expectation of healthy growth in earnings for the quarter ended June 30, 2016 (Q1FY17).

The top gainers from the F&O segment were Wockhardt, Aditya Birla Nuvo and Aurobindo Pharma. On the other hand, the top losers were Bank of India, Dabur India and Wipro. In the index options segment, maximum OI was being seen in the 8400-9000 calls and 7800-8600 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility addition by 1.23% and reached 15.99. The 50-share Nifty was up by 37.30 points or 0.44% to settle at 8,565.85.

Nifty July 2016 futures closed at 8584.15 on Wednesday at a premium of 18.30 points over spot closing of 8,565.85, while Nifty August 2016 futures ended at 8621.55 at a premium of 55.70 points over spot closing. Nifty July futures saw addition of 0.62 million (mn) units, taking the total outstanding open interest (OI) to 22.52 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 1.00 points at 231.75 compared with spot closing of 230.75. The number of contracts traded were 13,353.   

Tata Steel July 2016 futures traded at a discount of 6.40 points at 362.00 compared with spot closing of 368.40. The number of contracts traded were 9,672.

Tata Motors of July 2016 futures traded at a premium of 2.15 points at 495.85 compared with spot closing of 493.70. The number of contracts traded were 9,379.

Axis Bank July 2016 futures traded at a premium of 3.10 points at 559.60 compared with spot closing of 556.50. The number of contracts traded were 10,129. 

Sun Pharmaceuticals Industries July 2016 futures traded at a premium of 2.65 points at 799.65 compared with spot closing of 797.00. The number of contracts traded were 14,626.

Among Nifty calls, 8600 SP from the July month expiry was the most active call with an contraction of 0.18  million open interests. Among Nifty puts, 8500 SP from the July month expiry was the most active put with an addition of 0.81 million open interests. The maximum OI outstanding for Calls was at 8600 SP (5.93 mn) and that for Puts was at 8400 SP (6.11 mn). The respective Support and Resistance levels of Nifty are: Resistance 8586.32--- Pivot Point 8549.43--- Support --- 8528.97. 

The Nifty Put Call Ratio (PCR) finally stood at 1.22 for July month contract. The top five scrips with highest PCR on OI were WIPRO (1.47), HEROMOTOCO (1.30), HDFC (1.19), GRASIM (1.15) and MARUTI (1.14).  

Among most active underlying Wipro  witnessed an addition of 0.12 million of Open Interest in the July month futures contract, followed Wockhardt witnessing an addition of 0.32 million of Open Interest in the July month contract; State Bank of India  witnessed a contraction of 0.79 million of Open Interest in the July month contract, Reliance Industries witnessed an addition of 0.07 million of Open Interest in the July month contract and Infosys witnessed an addition of 0.05 million units of Open Interest in the July month's future contract.