Nifty settles with decent gains

After trading in a narrow range for most part of the day, the local benchmark Nifty surged higher in the final hour of trade and finished the day with the gain of around a percent as traders indulged in short-covering ahead of expiry of near month derivatives contracts. Sentiments got some support with the report that the Reserve Bank of India (RBI) further extended the grace period for banks, non-banking finance companies and microfinance companies to classify bad loans by 30 days in the case of agriculture and term loans of up to Rs 1 crore. Appreciation in rupee supported the up move in absence of any major global triggers. The rupee appreciated by 16 paise to 68.09 against the US dollar at the time of equity markets closing at the Interbank Foreign Exchange.

Traders were seen piling up positions in Metal, Auto and Realty stocks, while selling was witnessed only in pharma sector. The top gainers from the F&O segment were IFCI, Page Industries and Adani Power. On the other hand, the top losers were Divi's Laboratories, Union Bank of India and Adani Ports and Special Economic Zone. In the index option segment, maximum OI continues to be seen in the 8200-8500 calls and 7500-8100 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 1.67% and reached 15.28. The 50-share Nifty was up by 68 points or 0.86% to settle at 8,103.60.

Nifty January 2017 futures closed at 8117.30 on Thursday at a premium of 13.7 points over spot closing of 8103.60, while Nifty February 2017 futures ended at 8138.80 at a premium of 35.2 points over spot closing. Nifty January futures saw an addition of 3.40 million (mn) units, taking the total outstanding open interest (OI) to 16.14 million (mn) units. The near month derivatives contract will expire on January 25, 2017.

From the most active contracts, Sun Pharmaceuticals Industries January 2017 futures traded at a premium of 2.50 points at 617.60 compared with spot closing of 615.10. The numbers of contracts traded were 16,483.

HDFC Bank January 2017 futures traded at a premium of 3.70 points at 1206.70 compared with spot closing of 1,203.00. The numbers of contracts traded were 15,087.

Infosys January 2017 futures traded flat at a premium of 6.15 points at 996.15 compared with spot closing of 990.00. The numbers of contracts traded were 12,255.

Among Nifty calls, 8100 SP from the December month expiry was the most active call with an addition of 0.19  million open interests. Among Nifty puts, 8000 SP from the December month expiry was the most active put with an addition of 0.99 million open interests. The maximum OI outstanding for Calls was at 8300 SP (5.25 mn) and that for Puts was at 8000 SP (9.13 mn). The respective Support and Resistance levels of Nifty are: Resistance 8136.20--- Pivot Point 8078.50--- Support --- 8045.90.

The Nifty Put Call Ratio (PCR) finally stood at 1.09 for December month contract. The top five scrips with highest PCR on OI were Mcleod Russel India (4.50), Bosch Ltd (3.00), TVS Motor (2.73), Ajanta Pharma (2.60) and Apollo Hospitals Enterprise (2.60).

Among most active underlying, Vedanta witnessed an addition of 10.35 million of Open Interest in the January month futures contract, followed by Bharat Financial Inclusion witnessing an addition of 2.20 million of Open Interest in the January month contract, State Bank of India witnessed an addition of 14.16  million of Open Interest in the January month contract, Yes Bank witnessed an addition of 1.92  million units of Open Interest in the January month future contract and Maruti Suzuki India witnessed an addition of 0.39  million units of Open Interest in the January month future contract.