Nifty ends at fresh record high on first trading day of FY18

Riding on good PMI numbers and firm global cues, Indian equity benchmark -- Nifty -- ended the first trading day of FY18 at fresh closing high on Monday. The manufacturing sector activity rose to a five-month high in March due to a sharp rise in production and new orders. Nikkei India Manufacturing Purchasing Managers’ Index (PMI) rose to 52.5 in March from 50.7 in February. Traders look ahead for the US job data release and a meeting between the American and Chinese presidents later in the week also influenced sentiments. Sentiments also remained up-beat with Union Minister of State for Finance Arjun Ram Meghwal’s assurance that the historic tax reform Goods and Services Tax (GST) will see 100 percent implementation from July 1, 2017. He said that the Centre is already working on ironing out any road-block and even States are co-operating. However, investors shrugged off the report that the growth of eight core sectors slipped to over one-year low of 1% in February mainly due to decline in output of crude oil, natural gas, refinery products, fertilisers and cement. The growth rate of eight infrastructure sectors of coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity was 9.4% in February 2016. The previous low of 0.9% was recorded in December 2015. In January 2017, these sectors grew by 3.4%.

Traders were seen piling up positions in Realty, Financial Services and Pharma stocks, while selling was witnessed in IT, Media and PSU stocks. The top gainers from the F&O segment were Wockhardt, Jain Irrigation Systems and Larsen & Toubro. On the other hand, the top losers were United Spirits, Dish TV India and Torrent Pharmaceuticals. In the index option segment, maximum OI continues to be seen in the 9000-9600 calls and 8500-9200 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 7.47% and reached 11.49. The 50-share Nifty was up by 64.10 points or 0.70% to settle at 9,237.85.

Nifty April 2017 futures closed at 9263.25 on Monday at a premium of 25.40 points over spot closing of 9237.85, while Nifty May 2017 futures ended at 9280.35, at a premium of 42.50 points over spot closing. Nifty April futures saw a contraction of 0.58 million (mn) units, taking the total outstanding open interest (OI) to 22.36 million (mn) units. The near month derivatives contract will expire on April 27, 2017.

From the most active contracts, Reliance Industries April 2017 futures traded at a premium of 2.90 points at 1376.15 compared with spot closing of 1,373.25. The numbers of contracts traded were 39,805.

Larsen & Toubro April 2017 futures traded at a discount of 0.30 points at 1663.20 compared with spot closing of 1,663.50. The numbers of contracts traded were 20,346.

ICICI Bank April 2017 futures traded at a premium of 0.25 points at 286.90 compared with spot closing of 286.65. The numbers of contracts traded were 17,130.

Dr. Reddy's Laboratories April 2017 futures traded at a premium of 8.70 points at 2747.50 compared with spot closing of 2,738.80. The numbers of contracts traded were 13,194.

Wockhardt April 2017 futures traded at a premium of 3.55 points at 769.55 compared with spot closing of 766.00. The numbers of contracts traded were 12,206.

Among Nifty calls, 9300 SP from the April month expiry was the most active call with an addition of 0.37 million open interests. Among Nifty puts, 9200 SP from the April month expiry was the most active put with an addition of 0.94 million open interests. The maximum OI outstanding for Calls was at 9500 SP (3.89 mn) and that for Puts was at 9000 SP (4.93 mn). The respective Support and Resistance levels of Nifty are: Resistance 9258.00--- Pivot Point 9225.20--- Support --- 9205.05.

The Nifty Put Call Ratio (PCR) finally stood at 1.00 for April month contract. The top five scrips with highest PCR on OI were PVR (2.00), Tata Consultancy Services (1.74), KPIT Technologies (1.63), MRF (1.50) and Indraprastha Gas (1. 41).

Among most active underlying, Reliance Industries witnessed a contraction of 1.36 million units of Open Interest in the April month futures contract, followed by Larsen & Toubro witnessing an addition of 0.47 million units of Open Interest in the April  month contract, State Bank of India witnessed an addition of 2.33 million units of Open Interest in the April month contract, ICICI Bank witnessed an addition of 0.48 million units of Open Interest in the April  month future contract and Tata Steel witnessed an addition of 2.11 million units of Open Interest in the April  month future contract.