Nifty with quarter a percent gain; ends above 8400 mark

Indian local benchmark—Nifty—closed the session with a gain of around quarter a percent on Wednesday. Sentiments remained up-beat, as investors took encouragement from the United Nations World Economic Situation and Prospects (WESP) 2017 report, which highlighted that India's economy is projected to grow by 7.7 percent in fiscal year 2017, on the back of robust private consumption and significant domestic reforms gradually being implemented by the government. Some support also came with report suggesting that the Central Board of Direct Taxes put in abeyance its earlier circular raising foreign investors' concerns over a potential rise in tax liability under indirect transfer provisions. However, gains were capped ahead of a crucial meeting of Parliament's standing committee on finance over the demonetisation issue with Reserve Bank of India Governor Urjit Patel.

All the sectors ended in green. The top gainers from the F&O segment were Tata Elxsi, Jubilant Foodworks and Jaiprakash Associates. On the other hand, the top losers were Rural Electrification Corporation, JSW Energy and PC Jeweller. In the index option segment, maximum OI continues to be seen in the 8100-8700 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 1.36% and reached 15.18. The 50-share Nifty was up by 19 points or 0.23% to settle at 8,417.00.

Nifty January 2017 futures closed at 8429.35 on Wednesday at a premium of 12.35 points over spot closing of 8417.00, while Nifty February 2017 futures ended at 8454.85 at a premium of 37.85 points over spot closing. Nifty January futures saw an addition of 0.87 million (mn) units, taking the total outstanding open interest (OI) to 20.56 million (mn) units. The near month derivatives contract will expire on January 25, 2017.

From the most active contracts, United Spirits January 2017 futures traded at a discount of 2.70 points at 2109.30 compared with spot closing of 2,112.00. The numbers of contracts traded were 19,371.

Vedanta January 2017 futures traded at a discount of 0.05 points at 244.45 compared with spot closing of 244.50. The numbers of contracts traded were 15,807.

Tata Steel January 2017 futures traded at a discount of 0.85 points at 468.10 compared with spot closing of 468.95. The numbers of contracts traded were 15,471.

Axis Bank January 2017 futures traded at a premium of 1.35 points at 488.35 compared with spot closing of 487.00. The numbers of contracts traded were 13,816.

ICICI Bank January 2017 futures traded at a premium of 0.65 points at 268.65 compared with spot closing of 268.00. The numbers of contracts traded were 11,441.

Among Nifty calls, 8500 SP from the January month expiry was the most active call with a contraction of 0.14 million open interests. Among Nifty puts, 8400 SP from the january month expiry was the most active put with an addition of 0.12 million open interests. The maximum OI outstanding for Calls was at 8500 SP (4.91 mn) and that for Puts was at 8300 SP (6.27 mn). The respective Support and Resistance levels of Nifty are: Resistance 8452.40--- Pivot Point 8424.90--- Support --- 8389.50.

The Nifty Put Call Ratio (PCR) finally stood at 1.46 for January month contract. The top five scrips with highest PCR on OI were Dabur India (2.60), Marico (2.36), Pidilite Industries (2.26), Maruti Suzuki India (1.77) and Ajanta Pharma (1.63).

Among most active underlying, Tata Steel witnessed an addition of 0.21 million units of Open Interest in the January month futures contract, followed by Vedanta witnessing an addition of 0.10 million units  of Open Interest in the January month contract, Yes Bank witnessed an addition of 0.02  million units of Open Interest in the January month contract, Reliance Industries witnessed a contraction of 0.18 million units of Open Interest in the January month future contract and State Bank of India witnessed a contraction of 1.62 million units of Open Interest in the January month future contract.