Indian equity benchmark – Nifty -- showed traction on Monday and closed above 8850 mark with gain of over half a per cent. Sentiments remained optimistic with the report that the government's demonetisation move has led to widespread adoption of online payment and is expected to have a positive long term impact on the economy through better tax compliance, increase in the tax to GDP ratio and higher tax collections. It also highlighted that improved governance, favourable conditions to conduct business, transparency in government procedures and responsive policy making with an immediate focus on effective implementation of reforms will continue to evolve India into a preferred destination for foreign investment. Furthermore, inching towards the rolling out of GST, the GST Council on Saturday approved a law to compensate states for any loss of revenue from the implementation of the new national sales tax but deferred approval for enabling laws to the next meeting. On the global front, firming trend at other Asian bourses, tracking overnight gains on the US markets after President Donald Trump promised to release a much-anticipated plan for tax cuts soon, also boosted trading momentum.
Traders were seen piling up positions in Metal, IT, Realty and Media stocks, while selling was witnessed only in FMCG stocks. The top gainers from the F&O segment were DCB Bank, Jindal Steel & Power and GMR Infrastructure. On the other hand, the top losers were Havells India, Oil India and Axis Bank. In the index option segment, maximum OI continues to be seen in the 8700-9200 calls and 8000-8800 puts indicating this is the trading range expectation.
The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 1.32% and reached 13.61. The 50-share Nifty was up by 57.50 points or 0.65% to settle at 8,879.20.
Nifty February 2017 futures closed at 8873.85 on Monday at a discount of 5.35 points over spot closing of 8879.20, while Nifty March 2017 futures ended at 8904.10, at a premium of 24.90 points over spot closing. Nifty February futures saw a contraction of 2.55 million (mn) units, taking the total outstanding open interest (OI) to 21.69 million (mn) units. The near month derivatives contract will expire on February 23, 2017.
From the most active contracts, Tata Consultancy Services February 2017 futures traded at a discount of 7.20 points at 2497.80 compared with spot closing of 2,505.00. The numbers of contracts traded were 28,101.
HDFC Bank February 2017 futures traded at a discount of 8.45 points at 1402.90 compared with spot closing of 1,411.35. The numbers of contracts traded were 28,069.
Infosys February 2017 futures traded at a discount of 20.15 points at 1009.85 compared with spot closing of 1,030.00. The numbers of contracts traded were 19,254.
Tata Steel February 2017 futures traded at a premium of 0.45 points at 486.85 compared with spot closing of 486.40. The numbers of contracts traded were 19,015.
Sun Pharmaceuticals Industries February 2017 futures traded at a premium of 0.30 points at 679.30 compared with spot closing of 679.00. The numbers of contracts traded were 18,912.
Among Nifty calls, 8900 SP from the February month expiry was the most active call with an addition of 0.34 million open interests. Among Nifty puts, 8800 SP from the February month expiry was the most active put with an addition of 1.16 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.64 mn) and that for Puts was at 8800 SP (5.64 mn). The respective Support and Resistance levels of Nifty are: Resistance 8907.03--- Pivot Point 8858.42--- Support --- 8830.58.
The Nifty Put Call Ratio (PCR) finally stood at 1.35 for February month contract. The top five scrips with highest PCR on OI were Colgate-Palmolive (India) (2.85), Oracle Financial Services Software (2.00), Pidilite Industries (1.83), Bharti Airtel (1.62) and TVS Motor (1.60).
Among most active underlying, Tata Steel witnessed a contraction of 2.31 million units of Open Interest in the February month futures contract, followed by HDFC Bank witnessing a contraction of 0.01 million units of Open Interest in the February month contract, Tata Consultancy Services witnessed a contraction of 0.20 million units of Open Interest in the February month contract, Vedanta witnessed a contraction of 1.50 million units of Open Interest in the February month future contract and Maruti Suzuki India witnessed a contraction of 0.29 million units of Open Interest in the February month future contract.
