Nifty extends gain for third consecutive session

The fifty stock index -- Nifty -- continued its northward journey for third consecutive day on Tuesday and finished the volatile day of trade with a paltry gain of 15 points or 0.19%, on rising speculation that the Reserve Bank of India will lower its repo rate by 25 basis points to 6% in its next month monetary policy meeting. Investors got some confidence with the Commerce and industry minister Nirmala Sitharaman’s statement that the economy grew by 7.1% in the first half of 2016-17, though the central statistics office is yet to release GDP data for the second (July-September) quarter. She added that the government has been taking various steps to boost industrial production and growth, which includes ‘Make in India’ and ‘Startup India’ initiatives, liberalisation of FDI policy and development of industrial corridors.

Market participants were seen piling position in Auto, Consumer Durables and Realty stocks while selling was witnessed in IT, FMCG and Banking sector stocks. The top gainers from the F&O segment were Bharat Financial Inclusion, Eicher Motors and Godrej Industries. On the other hand, the top losers were Cadila Healthcare, Oil India and Shriram Transport Finance Company. In the index option segment, maximum OI continues to be seen in the 8000-8600 calls and 7500-8000 puts indicating this is the trading range expectation. In today's session, the 8200, 8300 and 8600 Call strikes saw addition of 5.50, 4.97 and 2.62 lakh shares, respectively. On the other hand, 8300, 8200 and 8100 Put strikes saw addition of 1.82, 8.28 and 4.67 lakh shares, respectively.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 1.92% and reached 17.70. The 50-share Nifty was up by 15.25 points or 0.19% to settle at 8,142.15.

Nifty December 2016 futures closed at 8172.05 on Tuesday at a premium of 29.90 points over spot closing of 8142.15, while Nifty January 2017 futures ended at 8202.20 at a premium of 60.05 points over spot closing. Nifty December futures saw an addition of 0.34 million (mn) units, taking the total outstanding open interest (OI) to 15.09 million (mn) units. The near month derivatives contract will expire on December 29, 2016.

From the most active contracts, Maruti Suzuki December 2016 futures traded at a premium of 10.20 points at 5098.35 compared with spot closing of 5088.15. The numbers of contracts traded were 15,517.

Bharat Financial December 2016 futures traded at a premium of 1.85 points at 734.85 compared with spot closing of 733.00. The numbers of contracts traded were 13,784.

ICICI Bank December 2016 futures traded at a premium of 1.15 points at 256.70 compared with spot closing of 255.45. The numbers of contracts traded were 12,983.

Tata Steel December 2016 futures traded at a premium of 2.15 points at 411.10 compared with spot closing of 408.95. The numbers of contracts traded were 10,923.

Axis Bank December 2016 futures traded at a premium of 2.40 points at 467.05 compared with spot closing of 464.65. The numbers of contracts traded were 10,469.  

Among Nifty calls, 8300 SP from the December month expiry was the most active call with an addition of 0.49 million open interests. Among Nifty puts, 8000 SP from the December month expiry was the most active put with an addition of 0.14 million open interests. The maximum OI outstanding for Calls was at 8300 SP (4.26 mn) and that for Puts was at 8000 SP (7.21 mn). The respective Support and Resistance levels of Nifty are: Resistance 8183.43--- Pivot Point 8156.07--- Support --- 8114.78.             

The Nifty Put Call Ratio (PCR) finally stood at 1.13 for December month contract. The top five scrips with highest PCR on OI were Hero MotoCorp (1.78), Ajanta Pharma (1.64), Godrej Industries (1.54), Aditya Birla Nuvo (1.48) and Colgate-Palmolive (India) (1.47).   

Among most active underlying, Maruti Suzuki India witnessed an addition of 0.09 million of Open Interest in the December month futures contract, followed by State Bank of India witnessing an addition of 0.59 million of Open Interest in the December month contract, Vedanta witnessed an addition of 0.61 million of Open Interest in the December month contract, Tata Steel witnessed an addition of 0.36 million of Open Interest in the December month contract and ICICI Bank witnessed an addition of 0.97 million units of Open Interest in the November month's future contract.