Nifty reclaims 8,850 level as Fed keeps interest rates unchanged

Buoyed by firm global cues, Indian benchmark -- Nifty -- ended the Thursday’s session in green terrain with a gain of over a percent, recapturing its crucial 8,850 mark. After a gap-up opening, market traded jubilantly throughout the session, as the US Federal Reserve kept rates unchanged. Traders also took encouragement with the report that country’s Current Account Deficit (CAD) narrowed to $0.3 billion, or 0.1 percent of GDP, in the first quarter of 2016-17, significantly lower than $6.1 billion or 1.2 percent of GDP in Q1 of 2015-16 on account of lower trade gap. Beside, appreciation in Indian currency too supported the sentiments. Market participants pared some of their profits at higher levels with the RBI stating that India Inc's external commercial borrowing (ECB) jumped by over four times to $3.17 billion in August this year. However, late short covering in blue-chip stocks and supportive leads from European markets ensured that local bourses do not shut shops way below the intraday highs. Finally, Nifty ended the session with a gain of 90 point.

On global front, European stock markets were trading higher with mining and oil firms being amongst the biggest gainers, getting a boost from a weaker dollar in the aftermath of the Fed decision. Asian markets ended mostly higher on Thursday, boosted by the US Federal Reserve’s decision to stick to the status quo, as well as rising commodity prices.

The top gainers from the F&O segment were Aurobindo Pharma, Bajaj Finance and TV18 Broadcast. On the other hand, the top losers were Dabur India, Axis Bank and Tech Mahindra. In the index options segment, maximum OI was being seen in the 8800-9000 calls and 8500-9100 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility contraction by 9.90% and reached 13.34. The 50-share Nifty was up by 90.30 points or 1.03% to settle at 8,867.45

Nifty September 2016 futures closed at 8884.45 on Thursday at a premium of 17 points over spot closing of 8,867.45, while Nifty October 2016 futures ended at 8925.75 at a premium of 58.30 points over spot closing. Nifty September futures saw contraction of 0.19 million (mn) units, taking the total outstanding open interest (OI) to 32.22 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 0.45 points at 258.40 compared with spot closing of 257.95. The numbers of contracts traded were 15,271.

ICICI Bank September 2016 futures traded at a premium of 0.85 points at 275.75 compared with spot closing of 274.90. The numbers of contracts traded were 13,500.

Axis Bank September 2016 futures traded at a premium of 3.65 points at 594.15 compared with spot closing of 590.50. The numbers of contracts traded were 19,754.

Tata Motors September 2016 futures traded at a premium of 1.15 points at 558.75 compared with spot closing of 557.60. The numbers of contracts traded were 12,688.   

Tata Steel September 2016 futures traded at a premium of 0.35 points at 377.75 compared with spot closing of 377.40. The numbers of contracts traded were 13,098.    Among Nifty calls, 8900 SP from the September month expiry was the most active call with a contraction of 0.38 million open interests. Among Nifty puts, 8800 SP from the September month expiry was the most active put with an addition of 0.68 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.50 mn) and that for Puts was at 8600 SP (5.53 mn). The respective Support and Resistance levels of Nifty are: Resistance 8894.60--- Pivot Point 8866.20--- Support --- 8839.05.             

The Nifty Put Call Ratio (PCR) finally stood at 1.34 for September month contract. The top five scrips with highest PCR on OI were EICHERMOT (2.78), MRF (2.33), MARUTI (1.49), GODREJCP (1.18) and GRASIM (1.13).   

Among most active underlying Yes Bank witnessed an contraction of 1.17 million of Open Interest in the September month futures contract, followed Aurobindo Pharma witnessing an contraction of 0.51 million of Open Interest in the September month contract, Axis Bank witnessed a addition  of 0.10 million of Open Interest in the September month contract, SBI witnessed an addition  of 3.88 million of Open Interest in the September month contract and Reliance Industries witnessed an contraction  of 0.15 million units of Open Interest in the September month's future contract.