Late hour recovery helps Nifty to reclaim 8,600 mark

The local benchmark -- Nifty -- ended the volatile day of trade in green terrain recapturing its crucial 8,600 level. After a cautious start, market altering between positive and negative territory but in a tight range, as sentiment remained downbeat with report that unemployment rate in India has shot up to a five-year high of 5 percent in 2015-16, with the figure significantly higher at 8.7 percent for women as compared to 4.0 percent for men. Sentiment also remained subdued due to geo-political tension after India went ahead with surgical strike on terror base across LoC on Wednesday night. Recovery in final hour of trade helped market to regain its green terrain on the back of buying in auto and realty. Some support also came with the report that Employees’ Provident Fund Organisation (EPFO) has decided to invest 10% of its annual incremental deposits or an estimated Rs 13,000 crore in the current fiscal in equity exchange traded funds (ETFs). Traders also took some encouragement with speculation that slowing inflation will allow new Reserve Bank of India (RBI) governor Urjit Patel to cut interest rates at next week’s monetary policy review. The IMF Managing Director Christine Lagarde’s statement that India is embarking on significant reforms and will grow at more than 7 per cent too supported market up-move.

On the global front, European stocks were trading with deep cut, as ongoing concerns over the European banking sector weighed and investors remained cautious ahead of a report on euro zone inflation due later in the session. Asian markets ended mostly in red on Friday, as investor sentiment was dented by overnight losses on Wall Street and as oil prices inched back from near-one month highs on skepticism over OPEC’s new plan to curb output.

The top gainers from the F&O segment were Tata Communications, Reliance Communications and Indiabulls Real Estate. On the other hand, the top losers were Cipla, Apollo Hospitals Enterprise and Tech Mahindra. In the index options segment, maximum OI was being seen in the 8600-9000 calls and 8500-8700 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility contraction by 6.88% and reached 17.18. The 50-share Nifty was up by 19.90 points or 0.23% to settle at 8,611.15

Nifty October 2016 futures closed at 8640.65 on Friday at a premium of 29.50 points over spot closing of 8,611.15, while Nifty November 2016 futures ended at 8681.25 at a premium of 70.10 points over spot closing. Nifty September futures saw contraction of 0.99 million (mn) units, taking the total outstanding open interest (OI) to 22.83 million (mn) units. The near month derivatives contract will expire on October 27, 2016.

From the most active contracts, State Bank of India October 2016 futures traded at a discount of 0.25 points at 251.75 compared with spot closing of 252.00. The numbers of contracts traded were 15,645.

ICICI Bank October 2016 futures traded at a premium of 1.30 points at 253.70 compared with spot closing of 252.40. The numbers of contracts traded were 13,578.

Punjab National Bank October 2016 futures traded at a premium of 0.50 points at 141.50 compared with spot closing of 141.00. The numbers of contracts traded were 11,117.

Axis Bank October 2016 futures traded at a premium of 1.85 points at 544.85 compared with spot closing of 543.00. The numbers of contracts traded were 12,760.   

Reliance Industries Industries October 2016 futures traded at a premium of 3.90 points at 1088.40 compared with spot closing of 1,084.50. The numbers of contracts traded were 12,705.   

Among Nifty calls, 8800 SP from the October month expiry was the most active call with a addition of 0.11 million open interests. Among Nifty puts, 8500 SP from the October month expiry was the most active put with an addition of 0.61 million open interests. The maximum OI outstanding for Calls was at 9000 SP (4.88 mn) and that for Puts was at 8500 SP (3.57 mn). The respective Support and Resistance levels of Nifty are: Resistance 8647.13--- Pivot Point 8601.17--- Support --- 8565.18.             

The Nifty Put Call Ratio (PCR) finally stood at 0.98 for October month contract. The top five scrips with highest PCR on OI were MRF (7.00), APOLLOHOSP (2.65), ACC (1.67), M&M (1.53) and JSWENERGY  (1.38).   

Among most active underlying Yes Bank witnessed an addition of 0.37 million of Open Interest in the October month futures contract, followed SBI witnessing an addition of 5.74 million of Open Interest in the October month contract, Maruti Suzuki India witnessed a addition  of 1.84 million of Open Interest in the October month contract, Punjab National Bank witnessed an addition  of 5.74 million of Open Interest in the October month contract and Reliance Industries witnessed an contraction  of 0.67 million units of Open Interest in the October month's future contract.