Nifty settles above 8,650 levels on firm cues from Asian peers

The Indian benchmark index -- Nifty-- traded jubilantly on the last day of the week and finished the session with a gain of almost a percent, as domestic sentiment remained buoyed on continued buying by investors ahead of IIP and inflation data scheduled to be released later in the day. After a positive start, market gained strength and traded in tight-band for most part of the day’s trade, as traders took some encouragement with the India Meteorological Department’s (IMD) statement that monsoon rains in India were 15 percent above average in the week ended August 10. The weather office has retained its forecast for an above-average monsoon this year, boosting hopes of a rise in farm output and income after two years of drought. Market extended its gains in second half to end higher with a gain of 80 point, as market participants got some support with the better-than-expected Q1 results from public sector lenders like State Bank of India and Bank of India.

On the global front, Asian shares closed mostly in green after a surge in oil prices which helped propel Wall Street to record highs, while mainland shares held on to gains on hopes that weaker-than-expected Chinese economic data would spur policy easing. European stocks are trading in red, as markets were jittery ahead of the release of economic growth data from the euro zone later in the trading session.

The top gainers from the F&O segment were Bank of India, State Bank of India and LIC Housing Finance. On the other hand, the top losers were Aditya Birla Nuvo, Wockhardt and United Breweries. In the index options segment, maximum OI was being seen in the 8600-9000 calls and 8400-8800 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility contraction by 3.11% and reached 13.77. The 50-share Nifty was up by 80.00 points or 0.93% to settle at 8,672.15.

Nifty August 2016 futures closed at 8678.40on Friday at a premium of 6.25 points over spot closing of 8,672.15, while Nifty September 2016 futures ended at 8727.95 at a premium of 55.80 points over spot closing. Nifty August futures saw contraction of 0.87 million (mn) units, taking the total outstanding open interest (OI) to 24.63 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 0.75 points at 244.20compared with spot closing of 243.45. The number of contracts traded were 87,678.

ICICI Bank  August 2016 futures traded at a premium of 0.80 points at 246.00 compared with spot closing of 245.20. The number of contracts traded were 13,890

Bank of Baroda August 2016 futures traded at a premium of 0.35 points at 149.80 compared with spot closing of 149.45. The number of contracts traded were 18,000.

Bank of India August 2016 futures traded at a discount of 0.10 points at 114.20 compared with spot closing of 114.30. The number of contracts traded were 14,948.   

Sun Pharmaceuticals Industries August 2016 futures traded at a premium of 7.10 points at 803.50 compared with spot closing of 796.40. The number of contracts traded were 33,170. 

Among Nifty calls, 8700 SP from the August month expiry was the most active call with a contraction of 0.48 million open interests. Among Nifty puts, 8600 SP from the August month expiry was the most active put with an addition of 0.85 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.32 mn) and that for Puts was at 8500 SP (5.61 mn). The respective Support and Resistance levels of Nifty are: Resistance 8702.82--- Pivot Point 8653.63--- Support --- 8622.97.             

The Nifty Put Call Ratio (PCR) finally stood at 1.02 for August month contract. The top five scrips with highest PCR on OI were ICIL (1.67), BHARATFORG (1.36), YESBANK (1.35), EICHERMOT (1.15) and JINDALSTEL (1.15).   

Among most active underlying State Bank of India witnessed an addition of 10.55 million of Open Interest in the August month futures contract, followed Aditya Birla Nuvo witnessing an addition of 0.30 million of Open Interest in the August month contract, Sun Pharmaceuticals Industries witnessed a addition of 0.69 million of Open Interest in the August month contract, Grasim Industries witnessed an addition of 0.23 million of Open Interest in the August month contract and Hindalco Industries witnessed an addition of 0.32 million units of Open Interest in the August month's future contract.