Nifty extends gain for second consecutive session; Nifty reclaims 8350 mark

Indian equity benchmark—Nifty-- extended gains for second consecutive session and ended with a gain of 92.05 points closer to 8400 level, following sustained buying by participants amid encouraging start of the corporate earnings season. Traders took encouragement from Prime Minister Narendra Modi’s statement that India is on threshold of becoming most digitised economy in the world. While he also declared his ambition to bring about a paradigm shift through a series of historic changes, reiterating the government's commitment to reforms and projecting India as a bright spot amid global gloom after having emerged as the world's fastest-growing economy. Some support also came from Finance Minister Arun Jaitley’s statement that the Centre is still aiming to roll out the Goods and Services Tax (GST) regime from April 1. He further said while most of the issues have been resolved, there are a few critical issues that still need to be addressed.

Traders were seen piling up positions in Metal, PSU and Media stocks, while selling was witnessed only in IT stocks. The top gainers from the F&O segment were Jindal Steel & Power, Union Bank of India and IndusInd Bank. On the other hand, the top losers were Jaiprakash Associates, Hexaware Technologies and Tata Elxsi. In the index option segment, maximum OI continues to be seen in the 8100-8600 calls and 7500-8400 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 2.55% and reached 14.80. The 50-share Nifty was up by 92.05 points or 1.11% to settle at 8,380.65.

Nifty January 2017 futures closed at 8387.20 on Wednesday at a premium of 6.55 points over spot closing of 8,380.65, while Nifty February 2017 futures ended at 8413.55 at a premium of 32.90 points over spot closing. Nifty January futures saw an addition of 0.64 million (mn) units, taking the total outstanding open interest (OI) to 19.35 million (mn) units. The near month derivatives contract will expire on January 25, 2017.

From the most active contracts, Tata Steel January 2017 futures traded at a premium of 0.15 points at 448.40 compared with spot closing of 448.25. The numbers of contracts traded were 23,193.

IndusInd Bank January 2017 futures traded at a discount of 1.70 points at 1233.30 compared with spot closing 1,235.00. The numbers of contracts traded were 22,727.

State Bank of India January 2017 futures traded at a premium of 1.05 points at 252.75 compared with spot closing of 251.70. The numbers of contracts traded were 18,398.

Yes Bank January 2017 futures traded at a premium of 3.00 points at 1318.00 compared with spot closing of 1,315.00. The numbers of contracts traded were 17,204.

HDFC Bank January 2017 futures traded at a premium of 3.10 points at 1233.70 compared with spot closing of 1,230.60. The numbers of contracts traded were 16,921.

Among Nifty calls, 8400 SP from the January month expiry was the most active call with a contraction of 0.14  million open interests. Among Nifty puts, 8300 SP from the january month expiry was the most active put with an addition of 1.72 million open interests. The maximum OI outstanding for Calls was at 8400 SP (5.06 mn) and that for Puts was at 8000 SP (6.84 mn). The respective Support and Resistance levels of Nifty are: Resistance 8405.68--- Pivot Point 8363.97--- Support --- 8338.93.

The Nifty Put Call Ratio (PCR) finally stood at 1.33 for January month contract. The top five scrips with highest PCR on OI were Marico (2.77), Dabur India (2.70), Pidilite Industries (2.44), Maruti Suzuki India (1.74) and TVS Motor (1.74).

Among most active underlying, Tata Steel witnessed an addition of 0.33 million units of Open Interest in the January month futures contract, followed by IndusInd Bank witnessing an addition of 0.16 million units  of Open Interest in the January month contract, Yes Bank witnessed an addition of 0.30  million units of Open Interest in the January month contract, State Bank of India witnessed a contraction of 1.77 million units of Open Interest in the January month future contract and ICICI Bank witnessed a contraction of 0.25 million units of Open Interest in the January month future contract.