Nifty settles above 8000 mark

Indian local benchmark, Nifty staged a strong rebound on Tuesday, as investors rushed to buy beaten down stocks. The Nifty surged 124 points to close above the psychological level of 8,000. Market witnessed a broad-based relief rally, supported by Finance minister’s comment on competitive tax structure compared to Monday's interpretation of possible capital gains tax. Hinting at lower taxes in the coming years, Finance Minister Arun Jaitley has said that India now needs to move to a lower level of taxation to provide services more competitive in nature, as competition is not domestic, it is global. Globally, investors’ participation continued to be muted due to holiday mood and lack of any major triggers.

Strong buying was observed in FMCG, Metal, PSU, Auto and Phrama counters. The top gainers from the F&O segment were IDFC Bank, Bharat Financial Inclusion and Engineers India. On the other hand, the top losers were TVS Motor Company, Just Dial and Hexaware Technologies. In the index option segment, maximum OI continues to be seen in the 8000-8500 calls and 7500-8000 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 9.16% and reached 15.08. The 50-share Nifty was up by 124 points or 1.58% to settle at 8032.85.

Nifty December 2016 futures closed at 8031.35 on Tuesday at a discount of 1.50 points over spot closing of 8032.85, while Nifty January 2017 futures ended at 8060.00 at a premium of 27.15 points over spot closing. Nifty December futures saw a contraction of 1.13 million (mn) units, taking the total outstanding open interest (OI) to 13.28 million (mn) units. The near month derivatives contract will expire on December 29, 2016.

From the most active contracts, HDFC Bank December 2016 futures traded at a discount of 1.25 points at 1184.75 compared with spot closing of 1186.00. The numbers of contracts traded were 25,604.

State Bank of India December 2016 futures traded at a premium of 0.60 points at 249.20 compared with spot closing of 248.60. The numbers of contracts traded were 18,382.

Sun Pharmaceuticals Industries December 2016 futures traded at a premium of 0.10 points at 621.50 compared with spot closing of 621.40. The numbers of contracts traded were 17,735.

Reliance Industries December 2016 futures traded at a discount of 1.85 points at 1063.00 compared with spot closing of 1,064.85. The numbers of contracts traded were 15,205.

Infosys December 2016 futures traded at a premium of 2.25 points at 999.15 compared with spot closing of 996.90. The numbers of contracts traded were 13,960.

Among Nifty calls, 8000 SP from the December month expiry was the most active call with a contraction of 2.06 million open interests. Among Nifty puts, 7900 SP from the December month expiry was the most active put with an addition of 1.15 million open interests. The maximum OI outstanding for Calls was at 8300 SP (5.03 mn) and that for Puts was at 8000 SP (5.43 mn). The respective Support and Resistance levels of Nifty are: Resistance 8083.77--- Pivot Point 7993.73--- Support --- 7942.82. 

The Nifty Put Call Ratio (PCR) finally stood at 0.97 for December month contract. The top five scrips with highest PCR on OI were Godrej Consumer Products (95), DCB Bank (3.17), Colgate-Palmolive (India) (2.35), Pidilite Industries (1.93) and Marico (1.29).

Among most active underlying, Vedanta witnessed a contraction of 8.60 million of Open Interest in the December month futures contract, followed by State Bank of India witnessing a contraction 17.22 million of Open Interest in the December month contract, Maruti Suzuki India witnessed a contraction of 0.52 million of Open Interest in the December month contract, HDFC Bank witnessed a contraction of 8.26  million units of Open Interest in the December month future contract and Reliance Industries witnessed a contraction of 3.17  million units of Open Interest in the December month future contract.