Nifty ends F&O expiry session on positive note

Indian equity benchmark -- Nifty --  erased some of its early gains and ended marginally in green on Thursday, as the near month February 2017 derivatives contracts expired and investors locked in some profits ahead of the long weekend. Despite a volatile trading session, the benchmark index Nifty touched its 52-week high during the intra-day trade. Market got support with International Monetary Fund (IMF) assessment report that the adoption of the GST could help raise India’s medium-term GDP growth to over 8% and create a single national market for enhancing the efficiency of the movement of goods and services. Some support also came with RBI Governor Urjit Patel’s statement that faster remonetisation and return of discretionary consumer demand will push economic activity in the latter part the fiscal. Patel, during the two-day Monetary Policy Committee meeting on February 7-8, also said that shifting monetary policy stance from accommodative to neutral will provide sufficient flexibility to move the policy rate in either direction. However, investors remained cautious with credit rating agency, Moody's Investors Service’s report that demonetisation has significantly impacted credit demand and deposit growth of banks but had a mixed effect on asset quality in the third quarter of current fiscal.

Traders were seen piling up positions in IT, Realty and Metal stocks, while selling was witnessed in Pharma, PSU and Financial Services stocks. The top gainers from the F&O segment were Jaiprakash Associates, Idea Cellular and Jindal Steel & Power. On the other hand, the top losers were Godrej Consumer Products, Ashok Leyland and Container Corporation of India. In the index option segment, maximum OI continues to be seen in the 8900-9500 calls and 8400-9000 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 2.19 % and reached 13.40. The 50-share Nifty was up by 12.60 points or 0.14 % to settle at 8939.50.

Nifty March 2017 futures closed at 8956.15 on Thursday at a premium of 16.65 points over spot closing of 8939.50, while Nifty April 2017 futures ended at 8990.55, at a premium of 51.05 points over spot closing. Nifty March futures saw an addition of 6.47 million (mn) units, taking the total outstanding open interest (OI) to 21.83 million (mn) units. The near month derivatives contract will expire on March 30, 2017.

From the most active contracts, HDFC Bank March 2017 futures traded at a discount of 2.20 points at 1388.80 compared with spot closing of 1391.00. The numbers of contracts traded were 36,809.

Reliance Industries March 2017 futures traded at a premium of 1.90 points at 1188.70 compared with spot closing of 1186.80. The numbers of contracts traded were 31,974.

Bharti Airtel March 2017 futures traded at a premium of 0.70 points at 367.10 compared with spot closing of 366.40. The numbers of contracts traded were 22,677.

ICICI Bank March 2017 futures traded at a discount of 0.10 points at 285.15 compared with spot closing of 285.25. The numbers of contracts traded were 21,396.

Sun Pharmaceuticals Industries March 2017 futures traded at a premium of 3.85 points at 677.05 compared with spot closing of 673.20. The numbers of contracts traded were 18,770.

Among Nifty calls, 9000 SP from the March month expiry was the most active call with an addition of 0.50 million open interests. Among Nifty puts, 8900 SP from the March  month expiry was the most active put with an addition of 0.50 million open interests. The maximum OI outstanding for Calls was at 9000 SP (3.36 mn) and that for Puts was at 8500 SP (3.09 mn). The respective Support and Resistance levels of Nifty are: Resistance 8971.92 --- Pivot Point 8949.73 --- Support --- 8917.32.

The Nifty Put Call Ratio (PCR) finally stood at 0.94 for March month contract. The top five scrips with highest PCR on OI were TV18 Broadcast (3.16), ACC (2.13), Grasim Industries (2.02), Torrent Power (1.78) and Indiabulls Real Estate (1.63).

Among most active underlying, Reliance Industries witnessed an addition of 3.73 million units of Open Interest in the March month futures contract, followed by Idea Cellular witnessing an addition of 11.29  million units  of Open Interest in the March  month contract, HDFC Bank witnessed an addition of 8.33 million units of Open Interest in the March month contract, Bharti Airtel witnessed an addition of 8.89 million units of Open Interest in the March  month future contract and ICICI Bank witnessed an addition of 19.42 million units of Open Interest in the March  month future contract.