Nifty end in green ahead of derivatives expiry

The local benchmark -- Nifty -- traded in green throughout the day and ended with a gain of almost half a percent on Wednesday. After a cautious start, market managed to trade in green, as sentiment remained upbeat with Finance Minister Arun Jaitley’s statement that the government is confident of meeting the April 2017 target to implement the Goods and Services Tax as state finance ministers cooperate to make the single tax reform a reality soon. Market extended its gains in second half, as sentiment got boost with the Global Competitiveness Index of World Economic Forum (WEF) report stating that India moved up 16 positions to rank 39th on a global index of the world's most competitive economies, reflecting improved monetary and fiscal policies. However, market participants pared some of their gains in dying hour of trade, as investors turned cautious ahead of September month F&O expiry tomorrow and the monetary policy review on October 4.

On the global front, European shares edged higher ahead of OPEC Meeting later in the day, while Asian markets ended mostly lower on Wednesday, with Japanese shares selling off amid a relatively stronger yen. Chinese stocks weakened despite strength in property shares, with thin trading indicating investors' reluctance to participate days ahead of the week-long National Day holiday that starts on October 1.

The top gainers from the F&O segment were IDFC, MRF and Indiabulls Real Estate. On the other hand, the top losers were Reliance Industries, Tech Mahindra and Dabur India. In the index options segment, maximum OI was being seen in the 8700-9000 calls and 8700-8800 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility contraction by 2.82% and reached 13.84. The 50-share Nifty was up by 38.75 points or 0.45% to settle at 8,745.15

Nifty September 2016 futures closed at 8758.45 on Wednesday at a premium of 13.30 points over spot closing of 8,745.15, while Nifty October 2016 futures ended at 8802.95 at a premium of 57.80 points over spot closing. Nifty September futures saw contraction of 3.32 million (mn) units, taking the total outstanding open interest (OI) to 17.27 million (mn) units. The near month derivatives contract will expire on September 29, 2016.

From the most active contracts, State Bank of India September 2016 futures traded at a premium of 0.60 points at 254.60 compared with spot closing of 254.00. The numbers of contracts traded were 21,499.

Axis Bank September 2016 futures traded at a premium of 0.25 points at 549.55 compared with spot closing of 549.30. The numbers of contracts traded were 21,723.

Punjab National Bank September 2016 futures traded at a discount of 0.10 points at 146.65 compared with spot closing of 146.75. The numbers of contracts traded were 14,815.

Tata Motors September 2016 futures traded at a discount of 0.05 points at 540.35 compared with spot closing of 540.40. The numbers of contracts traded were 16,394.   

Tata Steel September 2016 futures traded at a discount of 0.35 points at 380.85 compared with spot closing of 381.20. The numbers of contracts traded were 15,766.   

Among Nifty calls, 8800 SP from the September month expiry was the most active call with a contraction of 0.65 million open interests. Among Nifty puts, 8700 SP from the September month expiry was the most active put with an addition of 1.51 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.70 mn) and that for Puts was at 8700 SP (5.80 mn). The respective Support and Resistance levels of Nifty are: Resistance 8773.75--- Pivot Point 8738.45--- Support --- 8709.85.             

The Nifty Put Call Ratio (PCR) finally stood at 1.35 for September month contract. The top five scrips with highest PCR on OI were MRF (3.00), EICHERMOT (2.68), NIITTECH (1.66), MARUTI (1.48) and CENTURYTEX (1.28).   

Among most active underlying SBI witnessed an contraction of 13.79 million of Open Interest in the September month futures contract, followed Yes Bank witnessing an contraction of 2.17 million of Open Interest in the September month contract, Reliance Industries witnessed a contraction  of 3.64 million of Open Interest in the September month contract, Axis Bank witnessed an contraction  of 6.37 million of Open Interest in the September month contract and Tata Motors witnessed an contraction  of 4.06 million units of Open Interest in the September month's future contract.