Nifty settles above 8,700 level on firm global cues

Buoyed by firm global cues, the Indian benchmark index -- Nifty -- traded with volatility in a very tight band of twenty points on Monday and finished the session with a decent gain of one third of a percent. After a gap up opening, market traded in tight-band for most part of the day’s trade, as sentiments got some boost after Finance Minister Arun Jaitley said that Indian economy has defied global slowdown and geo-political tensions and is now poised to seize the opportunity to grow faster. Investors’ morale remained upbeat after Moody's Investors Service stated that Indian government’s targeting of inflation at four percent with a range of plus/minus two percent is a credit positive measure that will help macroeconomic stability.

On global front, Asian shares closed in green with strong US jobs data, while European stocks climbed, with gains for bank shares helping to push the regional benchmark toward a nearly two-week high.

Back home, gains remained capped on account of depreciation in Indian rupee. Traders also remained cautious ahead of Reserve Bank of India’s (RBI) policy review on Tuesday. In scrip specific development, Hindalco Industries rallied 3.7 percent after its U.S. subsidiary Novelis Inc. reported strong Q1 earnings.Britannia Industries soared 8.7 percent on reporting 13 percent year-on-year growth in net profit for the quarter ended June.

The top gainers from the F&O segment were Hindalco Industries, Bharat Petroleum Corporation and Adani Ports and Special Economic Zone. On the other hand, the top losers were Bharti Airtel, Idea Cellular and Bharti Infratel. In the index options segment, maximum OI was being seen in the 8500-9000 calls and 8000-8800 puts.The India Volatility Index (VIX), a gauge for market's short term expectation of volatility addition by 1.64% and reached 14.58. The 50-share Nifty was up by 28.20 points or 0.32% to settle at 8,711.35

Nifty August 2016 futures closed at 8742.30 on Monday at a premium of 30.95 points over spot closing of 8,711.35, while Nifty September 2016 futures ended at 8789.80 at a premium of 78.45 points over spot closing. Nifty August futures saw addition of 0.70 million (mn) units, taking the total outstanding open interest (OI) to 24.67 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 1.50 points at 234.15 compared with spot closing of 232.65. The number of contracts traded were 14,506.

Tata Steel August 2016 futures traded at a premium of 1.35 points at 381.05 compared with spot closing of 379.70. The number of contracts traded were 10,746.   

Reliance Industries of August 2016 futures traded at a premium of 7.55 points at 1034.85 compared with spot closing of 1,027.30. The number of contracts traded were 15,438.

Bharat Forge August 2016 futures traded at a premium of 7.30 points at 829.35 compared with spot closing of 822.05. The number of contracts traded were 19,887.   

Hindustan Petroleum Corporation August 2016 futures traded at a premium of 3.45 points at 1317.55 compared with spot closing of 1,314.10. The number of contracts traded were 9,905. 

 Among Nifty calls, 8800 SP from the August month expiry was the most active call with an contraction of 0.03 million open interests. Among Nifty puts, 8700 SP from the August month expiry was the most active put with an addition of 0.45 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.67 mn) and that for Puts was at 8500 SP (5.62 mn). The respective Support and Resistance levels of Nifty are: Resistance 8724.03--- Pivot Point 8710.82--- Support --- 8698.13.             

The Nifty Put Call Ratio (PCR) finally stood at 0.98 for August month contract. The top five scrips with highest PCR on OI were BHARATFORG (1.58), GODREJIND (1.48), GRASIM (1.32), EICHERMOT (1.26) and YESBANK (1.24).   

Among most active underlying Hero MotoCorp  witnessed an addition of 0.10 million of Open Interest in the August month futures contract, followed Biocon witnessing an addition of 0.33 million of Open Interest in the August month contract; State Bank of India witnessed a contraction of 1.21 million of Open Interest in the August month contract, Hindalco Industries witnessed an addition of 2.18 million of Open Interest in the August month contract and Bharat Forge witnessed an contraction of 0.47 million units of Open Interest in the August month's future contract.