Nifty settles above 8,650 level on firm global cues

Buoyed by firm global cues, the Indian benchmark index -- Nifty-- traded jubilantly on the last day of the week and finished the session with a gain of above one and half percent. After a gap up opening, market traded in tight-band for most part of the day’s trade as traders took some encouragement with report that government setting a target of April 1, 2017 for rollout of the Goods and Services Tax and unveiling a detailed roadmap for its implementation. Investors’ morale also remained upbeat after the Bank of England announced an interest rate cut and fresh stimulus package to counter the fallout from Britain’s vote to quit the European Union. Market extended its gains in last leg of trade to end near day’s high with a gain of 132 point, as market participants got some support with Moody’s statement that GST implementation will be positive for the country’s economic growth without any significant impact on inflation. Positive opening in European counterparts too provided strength to domestic market. Asian shares closed mostly in green, driven by the Bank of England’s aggressive stimulus measures and an overnight rally in crude oil prices, but traders kept cautious eye on US jobs data due later in the global trading day.

Back home, hectic buying activity was witnessed in steel sector stocks as the government had decided to extend the Minimum Import Price (MIP) regime on 66 items for a period of two months. However, telecom stocks displayed mixed reaction to the telecom regulator’s move to review charges carriers pay to each other for calls made from one network to another, fearing it may lead to a further reduction in those fees, hurting the bigger players, while benefiting newer and smaller operators.

The top gainers from the F&O segment were Bharat Forge, Apollo Tyres and Indian Oil Corporation. On the other hand, the top losers were The Karnataka Bank, Indiabulls Real Estate and Just Dial. In the index options segment, maximum OI was being seen in the 8500-9000 calls and 8400-8700 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility contraction by 5.20% and reached 14.35. The 50-share Nifty was up by 132.05 points or 1.54% to settle at 8,683.15.

Nifty August 2016 futures closed at 8708.20 on Friday at a premium of 25.05 points over spot closing of 8,683.15, while Nifty September 2016 futures ended at 8756.00 at a premium of 72.85 points over spot closing. Nifty August futures saw addition of 0.24 million (mn) units, taking the total outstanding open interest (OI) to 23.96 million (mn) units. The near month derivatives contract will expire on August 25, 2016.

From the most active contracts, State Bank of India August 2016 futures traded at a premium of 1.75 points at 233.60 compared with spot closing of 231.85. The number of contracts traded were 20,470.

ICICI Bank August 2016 futures traded at a premium of 1.30 points at 247.30 compared with spot closing of 246.00. The number of contracts traded were 15,412.   

Tata Motors of August 2016 futures traded at a premium of 1.55 points at 501.60 compared with spot closing of 500.05. The number of contracts traded were 13,151.

Tata Steel August 2016 futures traded at a premium of 2.30 points at 383.10 compared with spot closing of 380.80. The number of contracts traded were 15,211.   

Reliance Industries August 2016 futures traded at a premium of 1.50 points at 1019.50 compared with spot closing of 1018.00. The number of contracts traded were 14,992.   Among Nifty calls, 8700 SP from the August month expiry was the most active call with an contraction of 1.36 million open interests. Among Nifty puts, 8600 SP from the August month expiry was the most active put with an addition of 0.70 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.60 mn) and that for Puts was at 8500 SP (5.27 mn). The respective Support and Resistance levels of Nifty are: Resistance 8718.32--- Pivot Point 8654.23--- Support --- 8619.07.             

The Nifty Put Call Ratio (PCR) finally stood at 0.92 for August month contract. The top five scrips with highest PCR on OI were BHARATFORG (1.48), GODREJIND (1.41), EICHERMOT (1.21), YESBANK (1.20) and JINDALSTEL (1.17).   

Among most active underlying Bharat Forge witnessed an contraction of 0.40 million of Open Interest in the August month futures contract, followed State Bank of India witnessing an addition of 2.19 million of Open Interest in the August month contract; ICICI Bank  witnessed a addition of 1.16 million of Open Interest in the August month contract, Tata Steel witnessed an contraction of 0.78 million of Open Interest in the August month contract and Tata Motors witnessed an addition of 0.73 million units of Open Interest in the August month's future contract.