Nifty adds half a percent gain; ends just shy of 8,700 mark

Thursday turned out to be a fabulous day of trade for Indian equity market, where Nifty ended the session just shy of 8,700 mark with a gain of around half a percent. After a gap-up opening, market traded jubilantly throughout the session in a very tight band with Prime Minister Narendra Modi’s statement that India was the fastest growing economy and that it can play a major role in providing strength to global economy that is facing slowdown. Some support also came with the private report stating that corporate earnings growth in India is expected to recover this financial year and outpace its regional peers, but is likely to trail real economic growth in the near-term. Some amount of profit booking witnessed in second half as traders remained wary after the GST Council’s third round of deliberations ended without a decision on the rates structure after most States objected to a proposal to levy an additional cess on demerit goods.  The GST Council will meet again on November 3-4 to take decision on the Goods and Services Tax rates, which will have four slabs.

On the global front, European markets were trading mixed, as a clutch of profit warnings from companies throughout the region took their toll on the market. Asian markets ended mostly in red, while China stocks barely moved as investors weighed the implications of a slew of economic data released this week.

The top gainers from the F&O segment were Jaiprakash Associates, Jain Irrigation Systems and Syndicate Bank. On the other hand, the top losers were Biocon, HCL Technologies and United Breweries. In the index options segment, maximum OI was being seen in the 8600-9000 calls and 8600-8700 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility contraction by 3.06% and reached 14.16. The 50-share Nifty was up by 40.30 points or 0.47% to settle at 8,699.40

Nifty October 2016 futures closed at 8705.15 on Wednesday at a premium of 5.75 points over spot closing of 8,699.40, while Nifty November 2016 futures ended at 8745.70 at a premium of 46.30 points over spot closing. Nifty October futures saw addition of 0.64 million (mn) units, taking the total outstanding open interest (OI) to 18.61 million (mn) units. The near month derivatives contract will expire on October 27, 2016.

From the most active contracts, SBI October 2016 futures traded at a premium of 0.25 points at 260.35 compared with spot closing of 260.10. The numbers of contracts traded were 14,861.

ICICI Bank October 2016 futures traded at a premium of 0.10 points at 277.60 compared with spot closing of 277.50. The numbers of contracts traded were 30,546.

PNB October 2016 futures traded at a premium of 0.20 points at 146.00 compared with spot closing of 145.80. The numbers of contracts traded were 9,219.

Vedanta October 2016 futures traded at a discount of 0.45 points at 207.60 compared with spot closing of 208.05. The numbers of contracts traded were 13,027.   

Axis Bank October 2016 futures traded flat at 540.00. The numbers of contracts traded were 14,677.   

Among Nifty calls, 8700 SP from the October month expiry was the most active call with a addition of 0.15 million open interests. Among Nifty puts, 8600 SP from the October month expiry was the most active put with an addition of 0.58 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.27 mn) and that for Puts was at 8500 SP (5.51 mn). The respective Support and Resistance levels of Nifty are: Resistance 8724.83--- Pivot Point 8701.57--- Support --- 8676.13.             

The Nifty Put Call Ratio (PCR) finally stood at 1.00 for October month contract. The top five scrips with highest PCR on OI were OFSS (2.00), APOLLOHOSP (1.52), LT (1.47), ICICIBANK (1.30) and VEDL (1.21).   

Among most active underlying Yes Bank witnessed an contraction of 0.12 million of Open Interest in the October month futures contract, followed ICICI Bank witnessing an contraction of 1.75 million of Open Interest in the October month contract, Vedanta witnessed a addition of 1.46 million of Open Interest in the October month contract, SBI witnessed an contraction of 1.64 million of Open Interest in the October month contract and Reliance Industries witnessed an contraction  of 0.14 million units of Open Interest in the October month's future contract.