Nifty breaks two day falling spree, ends above 8100 mark

After witnessing drubbing in the previous two trading sessions, domestic index, Nifty heaved a sigh of relief, settling with gains of over half a percent on Monday, as bets went up in anticipation of a rate cut at Reserve Bank of India’s (RBI) policy review due on Wednesday. Investors largely turned cautious and preferred to remain on the sidelines over global markets situation following the Italian referendum and subsequent resignation of that country’s Prime Minister Matteo Renzi.  Swinging between gains and losses, Nifty fell as much as 30 points at intra-day and rose 70 points from day’s low by the end of trade led by gains in auto and metal sector indices. Sentiments got some support with Prime Minister Narendra Modi’s statement that India's economy is expected to witness a five-fold growth by 2040 owing to increase in investments. Modi said while global economy is going through uncertainty, India has shown tremendous resilience. Indian economy is more stable than others with investment in India at the highest levels.

Investors were seen piling up positions in Auto, Metal and FMCG stocks, while sharp selling was witnessed in IT, Oil & Gas and Capital Goods sector stocks. The top gainers from the F&O segment were Eicher Motors, GAIL (India) and Siemens. On the other hand, the top losers were Hindustan Petroleum Corporation, Idea Cellular and Mahindra & Mahindra Financial Services. 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 8100 and 8400 Call strikes saw addition of 4.59 and 2.48 lakh shares, respectively. On the other hand, 8100, 7900 and 7800 Put strikes saw addition of 3.99, 1.46 and 1.30 lakh shares, respectively.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 3.60% and reached 17.28. The 50-share Nifty was up by 41.95 points or 0.52% to settle at 8,128.75.

Nifty December 2016 futures closed at 8164.90 on Monday at a premium of 36.15 points over spot closing of 8,128.75, while Nifty January 2017 futures ended at 8195.05 at a premium of 66.3 points over spot closing. Nifty December futures saw a contraction of 0.21 million (mn) units, taking the total outstanding open interest (OI) to 15.52 million (mn) units. The near month derivatives contract will expire on December 29, 2016.

From the most active contracts, SBI December 2016 futures traded at a premium of 0.30 points at 258.00 compared with spot closing of 257.70. The numbers of contracts traded were 8,389.

ICICI Bank December 2016 futures traded at a premium of 1.35 points at 262.05 compared with spot closing of 260.70. The numbers of contracts traded were 8,781.

Axis Bank December 2016 futures traded at a premium of 1.95 points at 463.25 compared with spot closing of 461.30. The numbers of contracts traded were 9,116.

ICICI Bank December 2016 futures traded at a premium of 0.55 points at 260.05 compared with spot closing of 259.50. The numbers of contracts traded were 13,198.

HDFC Bank December 2016 futures traded at a premium of 4.2 points at 1199.20 compared with spot closing of 1,195.00. The numbers of contracts traded were 7,859.  

Among Nifty calls, 8200 SP from the December month expiry was the most active call with a contraction of 0.01 million open interests. Among Nifty puts, 8000 SP from the December month expiry was the most active put with an addition of 0.01 million open interests. The maximum OI outstanding for Calls was at 8300 SP (4.63 mn) and that for Puts was at 8000 SP (7.60 mn). The respective Support and Resistance levels of Nifty are: Resistance 8161.48--- Pivot Point 8109.17--- Support --- 8076.43.             

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 (1.55), Eicher Motors (1.45), Marico (1.36), Ajanta Pharma (1.19) and Ultratech Cement (1.10).   

Among most active underlying, Sun TV Network  witnessed an addition of 2.61 million of Open Interest in the December month futures contract, followed by Maruti Suzuki India witnessing an addition of 0.06 million of Open Interest in the December month contract, Vedanta witnessed an addition of 1.38 million of Open Interest in the December month contract, Tata Motors witnessed an addition of 0.46 million of Open Interest in the December month contract and Yes Bank witnessed an addition of 0.08 million units of Open Interest in the November month's future contract.