Nifty witnesses smart pullback; reclaims 9,100 level

Indian equity benchmark -- Nifty -- staged a smart recovery on Tuesday and closed in green, tracking positive trend seen in global markets after investors dismissed concerns over US President Donald Trump's ability to ability to push his agenda. Sentiments remained optimistic with the private report that manufacturing improved in March after a three months decline, while various government measures are likely to push up activity in the infrastructure sector going forward. The yearly SBI Composite Index bounced back to above 50-mark level to 50.3 after 3-months of decline. Besides, the monthly index has also improved to 53.3 in March, from 49.2 in February. Further, traders also took some encouragement with Revenue Secretary Hasmukh Adhia’s statement that GST will not only usher in a transparent tax system thereby reducing cascading of taxes, but will also result in reduction of prices for consumers and broaden the tax base in the country.

Traders were seen piling up positions in Media, Financial services and PSU stocks, while selling was witnessed only in Realty stocks. The top gainers from the F&O segment were Shriram Transport Finance Company, Jaiprakash Associates and Eicher Motors.  On the other hand, the top losers were Bharat Financial Inclusion, Petronet LNG and Apollo Tyres. In the index option segment, maximum OI continues to be seen in the 8900-9500 calls and 8400-9100 puts indicating this is the trading range expectation.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreasedd by 2.55% and reached 12.11. The 50-share Nifty was up by 55.60 points or 0.61% to settle at 9,100.80.

Nifty March 2017 futures closed at 9109.60 on Tuesday at a premium of 8.80 points over spot closing of 9100.80, while Nifty April 2017 futures ended at 9145.80, at a premium of 45 points over spot closing. Nifty March futures saw a contraction of 1.74 million (mn) units, taking the total outstanding open interest (OI) to 19.63 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 0.50 points at 1420.60 compared with spot closing of 1,421.10. The numbers of contracts traded were 24,666.

Axis Bank March 2017 futures traded at a discount of 0.75 points at 503.50 compared with spot closing of 504.25. The numbers of contracts traded were 24,405.

Infosys March 2017 futures traded at a discount of 4.45 points at 1034.50 compared with spot closing of 1,038.95. The numbers of contracts traded were 20,690.

State Bank of India March 2017 futures traded at a premium of 0.35 points at 282.55 compared with spot closing of 282.20. The numbers of contracts traded were 18,748.

Reliance Industries March 2017 futures traded at a premium of 3.05 points at 1249.35 compared with spot closing of 1,246.30. The numbers of contracts traded were 17,722.

Among Nifty calls, 9100 SP from the March month expiry was the most active call with a contraction of 1.08 million open interests. Among Nifty puts, 9100 SP from the March month expiry was the most active put with an addition of 1.14 million open interests. The maximum OI outstanding for Calls was at 9200 SP (6.71 mn) and that for Puts was at 8800 SP (5.07 mn). The respective Support and Resistance levels of Nifty are: Resistance 9114.20--- Pivot Point 9097.00--- Support --- 9083.60.

The Nifty Put Call Ratio (PCR) finally stood at 1.19 for March month contract. The top five scrips with highest PCR on OI were Torrent Power (1.47), HDFC (1.24), YES Bank (1.18), Ultratech Cement (1.14) and KPIT Technologies (1.10).

Among most active underlying, State Bank of India witnessed a contraction of 11.87 million units of Open Interest in the March month futures contract, followed by Axis Bank witnessing a contraction  of 5.88 million units of Open Interest in the March  month contract, Reliance Industries witnessed a contraction of 1.39 million units of Open Interest in the March month contract, HDFC Bank witnessed a contraction of 3.25 million units of Open Interest in the March  month future contract and Reliance Capital witnessed a contraction of 1.56 million units of Open Interest in the March  month future contract.