Positive global cues help Nifty to settle above 8700 level

Buoyed by firm global cues the Indian benchmark -- Nifty -- ended in green, recapturing its crucial 8,700 mark. Market make a positive opening, as traders took encouragement with Prime Minister Narendra Modi’s statement that the Goods and Services Tax law will boost domestic demand, create more opportunities for domestic business and drive job creation. He said that India is the fastest growing major economy and one of the most attractive destinations for FDI adding that indeed, they stand out as a bright spot in the global economy. Market got momentum and extended its gains in second half of the session, as sentiments turned upbeat with the private report stating that there is room for a 50 basis point rate cut by the Reserve Bank of India over the next few months with 25 bps each likely in February and April. Also, some support came with the Union Minister Arjun Ram Meghwal’s statement that country’s economy will grow 8 percent this fiscal, while agricultural growth is expected to be over 4 percent. In last leg of trade, Nifty pared some of it gains, as traders remained on sidelines with the report that Private equity investments declined 53 percent to touch $2.5 billion during July-September this year, lowest in the last nine quarters, largely owing to absence of big ticket deals. 

On the global front, Asian markets ended higher on Monday, as better than expected data from Japan and hopes that Beijing will speed up structural reforms at state-owned enterprises, boosted investor sentiments. European stocks were trading higher after the release of upbeat German and French data and as investors eyed the release of euro zone manufacturing and service sector activity data due later in the trading session.

The top gainers from the F&O segment were ONGC, Oriental Bank of Commerce and Arvind. On the other hand, the top losers were MindTree, Biocon and CEAT. 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 addition by 3.63% and reached 14.33. The 50-share Nifty was up by 15.90 points or 0.18% to settle at 8,708.95

Nifty October 2016 futures closed at 8720.25 on Monday at a premium of 11.30 points over spot closing of 8,708.95, while Nifty November 2016 futures ended at 8762.70 at a premium of 53.75 points over spot closing. Nifty October futures saw contraction of 1.63 million (mn) units, taking the total outstanding open interest (OI) to 16.59 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 0.20 points at 263.00 compared with spot closing of 262.80. The numbers of contracts traded were 19,515.

ICICI Bank October 2016 futures traded at a discount of 0.15 points at 284.35 compared with spot closing of 284.50. The numbers of contracts traded were 20,425.

Axis Bank October 2016 futures traded at a premium of 0.85 points at 522.65 compared with spot closing of 521.80. The numbers of contracts traded were 16,741.

HDFC Bank October 2016 futures traded at a discount of 0.10 points at 1264.90 compared with spot closing of 1,265.00. The numbers of contracts traded were 17,405.   

Tata Motors October 2016 futures traded at a premium of 1.20 points at 559.50 compared with spot closing of 558.30. The numbers of contracts traded were 13,758.  

Among Nifty calls, 8700 SP from the October month expiry was the most active call with a contraction of 0.27 million open interests. Among Nifty puts, 8700 SP from the October month expiry was the most active put with an addition of 0.53 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.35 mn) and that for Puts was at 8600 SP (5.76 mn). The respective Support and Resistance levels of Nifty are: Resistance 8735.88--- Pivot Point 8710.02--- Support --- 8683.08.             

The Nifty Put Call Ratio (PCR) finally stood at 1.06 for October month contract. The top five scrips with highest PCR on OI were OFSS (2.00), LT (1.37), APOLLOHOSP (1.34), ICICIBANK (1.28) and ONGC (1.19).   

Among most active underlying SBI witnessed an contraction of 7.95 million of Open Interest in the October month futures contract, followed ICICI Bank witnessing an contraction of 7.61 million of Open Interest in the October month contract, Tata Motors witnessed a contraction of 2.38 million of Open Interest in the October month contract, Reliance Industries witnessed an contraction of 2.51 million of Open Interest in the October month contract and Axis Bank witnessed an contraction  of 1.85 million units of Open Interest in the October month's future contract.