Nifty snaps two days losses; ends above 8250 mark

Positive expectations from the upcoming Union Budget, along with appreciation in the rupee and higher crude oil prices, lifted Indian benchmark, Nifty on Tuesday and ended the session with a gain of over half a percent. The Nifty opened higher and traded in positive terrain for the entire session as sentiments got support with Finance Minister Arun Jaitley’s statement that higher tax mop up shows uptick in economic activity including manufacturing during the April-December period. He said that during April-December 2016, direct tax collection was up by 12.01 per cent at Rs 5.53 lakh crore, as compared to revenue in the year-ago period, while indirect tax receipts soared 25 per cent to Rs 6.30 lakh crore. Some support also came with Moody’s report which maintained positive outlook on India and said beyond the short-term negative impact on growth, demonetisation has the potential to raise government revenues and provide some fiscal space to support growth if required. Furthermore, describing demonetisation as only a ‘bump’, Cisco Executive Chairman John Chambers said India is well-positioned to maintain GDP growth rate of over 7 per cent for the next few years and it should be a 'top ally' for the US in the Asia Pacific region.

Traders were seen piling up positions in Metal, Auto and FMCG stocks, while selling was witnessed only in Realty stocks. The top gainers from the F&O segment were Apollo Tyres, Bharat Electronics and MRF. On the other hand, the top losers were Petronet LNG, Jaiprakash Associates and Biocon. In the index option segment, maximum OI continues to be seen in the 8100-8600 calls and 7500-8300 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 1.84% and reached 15.19. The 50-share Nifty was up by 52.55 points or 0.64% to settle at 8,288.60.

Nifty January 2017 futures closed at 8293.85 on Tuesday at a premium of 5.25 points over spot closing of 8,288.60, while Nifty February 2017 futures ended at 8318.85 at a premium of 30.25 points over spot closing. Nifty January futures saw an addition of 2.17 thousand units, taking the total outstanding open interest (OI) to 18.70 million (mn) units. The near month derivatives contract will expire on January 25, 2017.

From the most active contracts, Axis Bank January 2017 futures traded at a discount of 0.15 points at 447.65 compared with spot closing of 447.80. The numbers of contracts traded were 17,801.

HDFC Bank January 2017 futures traded at a premium of 0.75 points at 1216.55 compared with spot closing 1,215.80. The numbers of contracts traded were 14,770.

Infosys January 2017 futures traded at a premium of 3.30 points at 974.45 compared with spot closing of 971.15. The numbers of contracts traded were 14,203.

IndusInd Bank January 2017 futures traded at a premium of 0.55 points at 1165.55 compared with spot closing of 1,165.00. The numbers of contracts traded were 13,524.

Tata Steel January 2017 futures traded at a premium of 0.20 points at 432.10 compared with spot closing of 431.90. The numbers of contracts traded were 11,938.

Among Nifty calls, 8300 SP from the January month expiry was the most active call with a contraction of 0.04  million open interests. Among Nifty puts, 8200 SP from the january month expiry was the most active put with an addition of 0.03 million open interests. The maximum OI outstanding for Calls was at 8400 SP (5.20 mn) and that for Puts was at 8000 SP (6.62 mn). The respective Support and Resistance levels of Nifty are: Resistance 8301.27--- Pivot Point 8281.13--- Support --- 8268.47. 

The Nifty Put Call Ratio (PCR) finally stood at 1.21 for January month contract. The top five scrips with highest PCR on OI were Marico (2.86), Pidilite Industries (2.78), Dabur India (2.66), Maruti Suzuki India (1.69) and TVS Motor (1.68).

Among most active underlying, IndusInd Bank witnessed an addition of 0.55 million of Open Interest in the January month futures contract, followed by Tata Steel witnessing an addition of 1.09 million of Open Interest in the January month contract, Tata Motors witnessed an addition of 0.02  million of Open Interest in the January month contract, Axis Bank witnessed an addition of 0.70 million units of Open Interest in the January month future contract and Vedanta witnessed an addition of 0.82 million units of Open Interest in the January month future contract.