Long Bets On Banks Lead Indices To New Record Highs

Indian benchmark equity indices advanced to close at a new record with investors lapping up bank stocks and the Nifty Bank futures contracts on Thursday.

The rally was primarily led by ICICI Bank, which posted its biggest single-day gain since September 2013, after most brokerages maintained their rating on the stock despite worsening asset quality indicators during the January-March period.

The Nifty 50's May futures saw an addition of only 0.8 percent increase in open interest but the Nifty Bank's futures open interest surged over 13 percent in reflect fresh long positions. Foreign investors however sold index futures worth Rs 439 crores on a net basis.

ICICI Bank and Axis Bank futures saw considerable buying with surge in their respective futures open interest on Thursday.

The India Volatility Index (VIX) declined 1.7 percent to close at 11.33 indicating further contraction in option premiums as indices gained for the day.

Maximum open interest was with the 9,300 put and 9,500 call indicating a near term range for the Nifty. Foreign investors bought 16,690 index call option contracts and 10,612 index put option contracts on a net basis reflecting bullish sentiment.