Nifty reclaims 8600 mark

The local benchmark ---Nifty--- ended the day with gains of over a percent on Wednesday as positive global cues on optimism for stronger U.S. economic growth spurred heavy short-covering on the eve of derivatives expiry. Encouraging quarterly results from the likes of HDFC Bank, Kotak Mahindra Bank, Biocon and Crompton Greaves coupled with a steadier trend in rupee on expectations of an investor-friendly budget also offered some support. Sentiments remained optimistic with report that Donald Trump and Narendra Modi have discussed opportunities to strengthen the partnership between the United States and India in broad areas such as the economy and defense. Some support also came with the repot that Germany is set to finance long-term strategic projects in India particularly in the railway, infrastructure and smart cities sectors as part of efforts to support India's growth story.

Traders were seen piling up positions in Banking, Financial Services and Media stocks, while selling was witnessed in Pharma and IT stocks. The top gainers from the F&O segment were Bharat Financial Inclusion, Bajaj Finance and Kotak Mahindra Bank. On the other hand, the top losers were Wockhardt, Ajanta Pharma and Tata Elxsi. In the index option segment, maximum OI continues to be seen in the 8500-9000 calls and 8000-8500 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 0.75% and reached 15.17. The 50-share Nifty was up by 126.95 points or 1.50% to settle at 8,602.75.

Nifty February 2017 futures closed at 8614.85 on Wednesday at a premium of 12.10 points over spot closing of 8602.75, while Nifty March 2017 futures ended at 8636.10, at a premium of 33.35 points over spot closing. Nifty February futures saw an addition of 5.49 million (mn) units, taking the total outstanding open interest (OI) to 18.16 million (mn) units. The near month derivatives contract will expire on February 23, 2017.

From the most active contracts, HDFC Bank February 2017 futures traded at a premium of 8.55 points at 1293.55 compared with spot closing of 1,285.00. The numbers of contracts traded were 23,257.

Reliance Industries February 2017 futures traded at a premium of 6.10 points at 1024.15 compared with spot closing 1,018.05. The numbers of contracts traded were 20,078.

Kotak Mahindra Bank February 2017 futures traded at a premium of 2.25 points at 796.15 compared with spot closing of 793.90. The numbers of contracts traded were 19,885.

ICICI Bank February 2017 futures traded at a premium of 0.30 points at 260.80 compared with spot closing of 260.50. The numbers of contracts traded were 18,413.

Bharat Financial Inclusion February 2017 futures traded at a premium of 9.85 points at 752.60 compared with spot closing of 742.75. The numbers of contracts traded were 18,081.Among Nifty calls, 8600 SP from the February month expiry was the most active call with an addition of 0.53 million open interests. Among Nifty puts, 8400 SP from the February month expiry was the most active put with an addition of 1.64 million open interests. The maximum OI outstanding for Calls was at 9000 SP (3.06 mn) and that for Puts was at 8400 SP (3.23 mn). The respective Support and Resistance levels of Nifty are: Resistance 8645.58--- Pivot Point 8569.77--- Support --- 8526.93.

The Nifty Put Call Ratio (PCR) finally stood at 1.03 for February month contract. The top five scrips with highest PCR on OI were Torrent Pharmaceuticals(6.00), KPIT Technologies(5.67),NIIT Technologies(3.00),Cadila Healthcare(2.75) and Tech Mahindra(1.74).

Among most active underlying, Maruti Suzuki India witnessed an addition of 0.55 million units of Open Interest in the February month futures contract, followed by Bharat Financial Inclusion witnessing an addition of 3.96 million units  of Open Interest in the February month contract, Yes Bank witnessed an addition of 2.52 million units of Open Interest in the February month contract, Tata Steel witnessed an addition of 5.15 million units of Open Interest in the February month future contract and Vedanta witnessed an addition of 7.60 million units of Open Interest in the February month future contract.