Nifty ends in green as US rate fears ease

Nifty ended the Friday’s session in green terrain with a gain of around half a percent, recapturing its crucial 8,750 bastion, as weak US retail sales data dimmed the prospects of a rate hike by the US Federal Reserve at its meeting later this month. Though, it pared some of their gains in second half of trade following weak opening in European counterparts. Earlier, markets made a gap-up opening, as traders took encouragement with report that Prime Minister Narendra Modi is targeting to roll out the ambitious GST on April 1 next year, has directed that all steps required in this direction should be completed before that date. He has also said that GST Council would need to have intensive meetings to be able to make timely recommendations relating to its mandate. Beside, investors got some confidence with the report that India is expected to register a record food grain production during the 2016-17 crop year (July-June). The government has already set a target of 270.10 million tonnes of yield for the year, surpassing its previous record of 265.04 million tonnes in 2013-14. However, in last leg of trade, index pared some of its early gains tracking weakness in European counters. Investors also remained nervous with the exports declining for the second consecutive month in August by 0.3 percent to $ 21.51 billion due to dip in shipments of products like petroleum and leather. The imports too contracted by 14 percent to $29.91 billion, leaving a trade deficit of $7.67 billion in the month under review. Finally, Nifty ended the session in green with 37 points.

On global front, European stocks were trading lower weighed by losses in the financial sector and as investors became more cautious ahead of the Federal Reserve’s policy meeting next week. Meanwhile, Asian markets ended higher on Friday in a relatively quiet session, as several markets in the region were shut, while traders got some comfort after weak US data reduced already low expectations of an interest rate increase by the Federal Reserve next week.

The top gainers from the F&O segment were Wockhardt, TVS Motor and Sintex Industries. On the other hand, the top losers were Yes Bank, GMR Infrastructur and Amara Raja Batteries. In the index options segment, maximum OI was being seen in the 8700-9000 calls and 8600-8800 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility contraction by 0.66% and reached 14.58. The 50-share Nifty was up by 37.30 points or 0.43% to settle at 8,779.85

Nifty September 2016 futures closed at 8808.20 on Friday at a premium of 28.35 points over spot closing of 8,779.85, while Nifty October 2016 futures ended at 8846.65 at a premium of 66.80 points over spot closing. Nifty September futures saw addition of 0.08 million (mn) units, taking the total outstanding open interest (OI) to 32.12 million (mn) units. The near month derivatives contract will expire on September 29, 2016.

From the most active contracts, State Bank of India September 2016 futures traded at a premium of 0.30 points at 255.50 compared with spot closing of 255.20. The numbers of contracts traded were 16,941.

ICICI Bank September 2016 futures traded at a premium of 0.65 points at 268.55 compared with spot closing of 267.90. The numbers of contracts traded were 17,644.

Axis Bank September 2016 futures traded at a premium of 3.00 points at 602.95 compared with spot closing of 599.95. The numbers of contracts traded were 21,879.

Tata Motors September 2016 futures traded at a premium of 0.65 points at 551.25 compared with spot closing of 550.60. The numbers of contracts traded were 14,913.   

Reliance Industries September 2016 futures traded at a premium of 5.40 points at 1078.30 compared with spot closing of 1,072.90. The numbers of contracts traded were 35,375.   

Among Nifty calls, 8900 SP from the September month expiry was the most active call with a addition of 0.20 million open interests. Among Nifty puts, 8800 SP from the September month expiry was the most active put with an addition of 0.72 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.24 mn) and that for Puts was at 8600 SP (6.03 mn). The respective Support and Resistance levels of Nifty are: Resistance 8834.83--- Pivot Point 8792.67--- Support --- 8737.68.             

The Nifty Put Call Ratio (PCR) finally stood at 1.22 for September month contract. The top five scrips with highest PCR on OI were MRF (2.67), MARUTI (1.42), GODREJCP (1.40), CENTURYTEX  (1.12) and GRASIM (1.09).   

Among most active underlying Yes Bank witnessed an addition of 1.02 million of Open Interest in the September month futures contract, followed Reliance Industries witnessing an contraction of 0.25 million of Open Interest in the September month contract, Maruti Suzuki India witnessed a contraction  of 0.05 million of Open Interest in the September month contract, State Bank of India witnessed an addition  of 1.10 million of Open Interest in the September month contract and Wockhardt witnessed an addition  of 0.65 million units of Open Interest in the September month's future contract.