Nifty bounces back; ends above 8100 mark

The fifty stock index -- Nifty -- kicked off December series of derivative contracts on a strong note riding on the healthy gains in IT and pharma stocks, which rallied thanks to rupee’s record fall yesterday against the dollar. Sentiments got some support with Finance Minister Arun Jaitley’s statement that the government’s demonetisation move is going to have a positive impact on the economy, including GDP. Jaitley said there will be a positive impact because a lot of money that operates in the shadowy economy will now become part of the banking structure and banks will have a lot more money to support the economy. Besides, a firm trend in the Asian markets after the relentless rally in the dollar paused, on account of Thanksgiving break in the United States too supported the rise.

Meanwhile, Nifty suffered their worst setback in 15 months in the November F&O series that concluded on Thursday. The benchmark Nifty fell 7.5% in the series, most since the August 2015 derivatives series. Uncertainty over the impact of demonetization and the prospects of a rate hike by the US Federal Reserve seem to have pushed F&O investors into a cautious mode. The rollover of open interest positions to the December series of the Nifty 50 is 61%, lower than the three-month average of about 71%. Bank Nifty also witnessed a rollover of 61% to the next-month series, against a three-month average of 75%. In today's session, the 8100, 8300 and 8400 Call strikes saw addition of 2.6, 3.41 and 3.87 lakh shares, respectively. On the other hand, 8100, 8000 and 7900 Put strikes saw addition of 4.94, 11.14 and 5.02 lakh shares, respectively.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 2.63% and reached 17.61. The 50-share Nifty was up by 148.80 points or 1.87% to settle at 8,114.30.

Nifty December 2016 futures closed at 8126.35 on Friday at a premium of 12.05 points over spot closing of 8,114.30, while Nifty January 2017 futures ended at 8154.35 at a premium of 40.05 points over spot closing. Nifty December futures saw a contraction of 0.86 million (mn) units, taking the total outstanding open interest (OI) to 14.14 million (mn) units. The near month derivatives contract will expire on December 29, 2016.

From the most active contracts, State Bank of India December 2016 futures traded at a premium of 1.35 points at 262.20 compared with spot closing of 260.85. The numbers of contracts traded were 15,388.

ICICI Bank December 2016 futures traded at a premium of 0.8 points at 261.10 compared with spot closing of 260.30. The numbers of contracts traded were 10,878.

Vedanta December 2016 futures traded at a discount of 1.30 points at 222.20 compared with spot closing of 223.50. The numbers of contracts traded were 10,728.

Hindalco Industries December 2016 futures traded at a premium of 1.10 points at 181.15 compared with spot closing of 180.05. The numbers of contracts traded were 12,478.

HDFC Bank December 2016 futures traded at a premium of 9.05 points at 1195.15 compared with spot closing of 1186.10. The numbers of contracts traded were 10,435.   Among Nifty calls, 8200 SP from the December month expiry was the most active call with an addition of 0.09 million open interests. Among Nifty puts, 8000 SP from the December month expiry was the most active put with an addition of 1.11 million open interests. The maximum OI outstanding for Calls was at 8400 SP (3.22 mn) and that for Puts was at 8000 SP (6.71 mn). The respective Support and Resistance levels of Nifty are: Resistance 8165.45 --- Pivot Point 8071.10 --- Support --- 8019.95.             

The Nifty Put Call Ratio (PCR) finally stood at 1.11 for December month contract. The top five scrips with highest PCR on OI were Marico (5.82), Aditya Birla Nuvo (3.67), CESC (3.62), Grasim (2.50) and Ajanta Pharma (1.73).   

Among most active underlying, Vedanta witnessed an addition of 2.26 million of Open Interest in the December month futures contract, followed State Bank of India witnessing an addition of 2.85 million of Open Interest in the December month contract, Tata Steel witnessed an addition of 1.26 million of Open Interest in the December month contract, Infosys witnessed an addition of 0.49 million of Open Interest in the December month contract and Yes Bank witnessed an addition of 0.27 million units of Open Interest in the November month's future contract.