Nifty extends gain for second consecutive session on penultimate day of F&O expiry

Prolonging its gains for second day in a row, Indian benchmark index -- Nifty -- ended the session in the green on account of increased buying in select stocks coupled with covering-up of pending short-positions ahead of November month F&O expiry tomorrow. Market participants continued to accumulate quality stocks at reasonable valuations, though they were worried over quarterly earnings growth after currency demonetisation. Sentiments got some support with the private report indicating that a moderation in aggregate food prices will lower inflation momentum in November and the CPI inflation is expected to moderate to around 4 percent in November from 4.2 percent in October. However, gains remained capped with the report that government has assessed the impact of demonetisation that is likely to bring the gross domestic product (GDP) growth to 5.5% in the third quarter of financial year 2016-17, a steep drop from 7.1 per cent in the first quarter. Besides, depreciation in rupee value against dollar also weighed on the sentiments.

The top gainers from the F&O segment were Indiabulls Real Estate, Cadila Healthcare and Reliance Infrastructure. On the other hand, the top losers were Apollo Tyres, Cummins India and Mahindra & Mahindra. In the index option segment, maximum OI continues to be seen in the 8100-8300 calls and 7800-8000 puts indicating this is the trading range expectation.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 2.30% and reached 18.04. The 50-share Nifty was up by 31 points or 0.39% to settle at 8,033.30.

Nifty November 2016 futures closed at 8024.85 on Wednesday at a discount of 8.45 points over spot closing of 8,033.30, while Nifty December 2016 futures ended at 8064.70 at a premium of 31.4 points over spot closing. Nifty November futures saw a contraction of 2.50 million (mn) units, taking the total outstanding open interest (OI) to 12.72 million (mn) units. The near month derivatives contract will expire on November 24, 2016.

From the most active contracts, ICICI Bank November 2016 futures traded at a discount of 0.20 points at 264.80 compared with spot closing of 265.00. The numbers of contracts traded were 16,048.

State Bank of India November 2016 futures traded at a premium of 0.70 points at 258.75 compared with spot closing of 258.05. The numbers of contracts traded were 18,400.

HDFC Bank November 2016 futures traded at a discount of 10.6 points at 1192.20 compared with spot closing of 1,181.60. The numbers of contracts traded were 15,002.

Sun Pharmaceuticals Industries November 2016 futures traded at a discount of 2.15 points at 704.15 compared with spot closing of 702.00. The numbers of contracts traded were 16,745.

Hindalco Industries November 2016 futures traded at a premium of 0.40 points at 173.55 compared with spot closing of 173.10. The numbers of contracts traded were 17,641.  

Among Nifty calls, 8100 SP from the November month expiry was the most active call with an addition of 0.39 million open interests. Among Nifty puts, 8000 SP from the November month expiry was the most active put with an addition of 0.77 million open interests. The maximum OI outstanding for Calls was at 8500 SP (4.87 mn) and that for Puts was at 8000 SP (5.16 mn). The respective Support and Resistance levels of Nifty are: Resistance 8067.97 --- Pivot Point 8020.53 --- Support --- 7985.87.             

The Nifty Put Call Ratio (PCR) finally stood at 0.52 for November month contract. The top five scrips with highest PCR on OI were BPCL (0.98), OIL (0.94), UBL (0.90), Titan (0.86) and Cummins India (0.86).   

Among most active underlying Vedanta witnessed a contraction of 6.67 million of Open Interest in the November month futures contract, followed State Bank of India witnessing a contraction of 13.74 million of Open Interest in the November month contract, Larsen & Toubro witnessed a contraction of 1.58 million of Open Interest in the November month contract, Axis Bank witnessed a contraction of 10.40 million of Open Interest in the November month contract and Hindalco Industries witnessed a contraction of 10.60 million units of Open Interest in the November month's future contract.