Nifty hits 5-month high on speculation of Fed to maintain stimulus for US economy

Nifty ended the week in high spirits above 6150 highest level in last 5 months after rupee hit a two-month high since August 8 as concerns over global macro economic factors eased. Nifty edged higher above 6,100 levels in early trades on firm Asian stocks after US lawmakers came to an agreement to raise the debt ceiling and avoided a potential default coupled with encouraging Jul-Sep growth from China. China’s gross domestic product expanded 7.8 percent last quarter, halting a two-quarter slowdown. The uptrend on the street continued as index hit fresh intraday highs in late-morning trades. Investors' sentiments were boosted as the rupee traded stronger at 61.12/13 against the dollar versus its close of 61.23/24 on Thursday on the back of positive sentiments in the market and dollar sales by banks. Some support to the index came in with a study commissioned by market regulator Securities and Exchange Board of India (Sebi) suggesting lowering of securities transaction tax (STT) to boost the capital market.

Afternoon trade, index hit fresh intraday highs in afternoon trade after European market opened higher. Invertors’ sentiments improved after Moody’s Analytics stated that Indian economy has bottomed out and recovery is on the way on the back of improved investments, as the government has been actively trying to restart stalled investment projects, both in the public and private sectors.  In last leg of trade, index continued to race upwards on Street, led by stocks from Banking and Metal. Banking stocks rallied on anticipation that Reserve Bank of India would increase the cap of the amount that banks’ could borrow through repo window in its upcoming monetary policy review on October 29. Meanwhile, metal stocks rallied in trade after China’s economy, the world's largest consumer of copper and aluminum, registered better than expected GDP growth index continued to race upwards and were trading near their day's high.

NSE sectoral indices made a green closing. CNX Bank up by 3.95%, CNX Finance up by 3.54%, CNX Metal up 3.34%, CNX Realty up 3.04% and CNX PSU Bank up 2.73%. On the other hand, there was no loser on index.

The India VIX decreased by 4.46 % at 20.12 as compared to its previous close of 21.06 on Thursday. The 50-share CNX Nifty inclined by 143.50 points or 2.37% to settle at 6,189.35.

Nifty October 2013 futures closed at 6210.45 on Friday at a premium of 21.10 points over spot closing of 6,189.35, while Nifty November 2013 futures ended at 6259.55 at a premium of 70.20 points over spot closing. Nifty October futures saw contraction of 0.41 million (mn) units taking the total outstanding open interest (OI) to 18.81 mn units. The near month October 2013 derivatives contract will expire on October 31, 2013.

From the most active contracts, JP Associates October 2013 futures last traded at a premium of 0.05 points at 47.10 compared with spot closing of 47.05. The number of contracts traded was 23,463.

Tata Steel October 2013 futures were at a premium of 1.15 points at 330.15 compared with spot closing of 329.00. The number of contracts traded was 25,324. 

Yes Bank October 2013 futures last traded at a premium of 1.80 points at 348.50 compared with spot closing of 346.70. The number of contracts traded was 18,038.

ICICI Bank October 2013 futures were at a premium of 4.55 points at 1014.60 compared with spot closing of 1010.05. The number of contracts traded was 24,137. 

Reliance Industries October 2013 futures were at a premium of 5.40 points at 908.90 compared with spot closing of 903.50. The number of contracts traded was 23,377.Among Nifty calls, 6,300 SP from the October month expiry was the most active call with an addition of 0.07 million open interest.

Among Nifty puts, 5,700 SP from the October month expiry was the most active put with an contraction  of 0.40 million open interest.

The maximum OI outstanding for Calls was at 6,300 SP (4.75mn) and that for Puts was at 5,700 SP (6.29 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6236.9-- Pivot Point 6153.9-- Support -- 6106.35.

The Nifty Put Call Ratio (PCR) OI wise, stood at 1.55 for October month contract. The top five scrips with highest PCR on OI were, Havells 3.78, Tata Motors 1.55, Ultra Cement 1.48, Infosys 1.46 and  Finan Tech 1.42.

Among most active underlying, Infosys witnessed contraction of 0.08 million of Open Interest in the October month futures contract followed by SBI with an addition of 0.03 million of Open Interest in the near month contract; United Spirits witnessed contraction of 0.26 million of Open Interest in the October month futures. Reliance Industries witnessed contraction of 0.14 million in Open Interest in the October month contract and Yes Bank witnessed an addition of 0.94 million in Open Interest in the near month futures contract.