Nifty ekes out modest gains to close at record high

In a volatile trading session, Indian equity benchmark -- Nifty -- eked out modest gains to close at record high on Wednesday ahead of the Reserve Bank of India's monetary policy review due tomorrow. The UP government's decision to waive off farmers' loan of up to Rs 1 Lakh and massive FII inflows also contributed to the market rally. Traders took some encouragement after industry body Confederation of Indian Industry (CII) said that the impact of demonetisation was almost over and the market has started to revive with modest growth in March. Sentiments also remained optimistic with report that tax revenue to the central government rose 18% to Rs 17.10 lakh crore as compared to last year, aided by steady growth in direct taxes and a sharp jump in excise and service tax receipts. Some support also came with report that Federation of Indian Export Organisations (FIEO) expecting the merchandise exports from India to witness double-digit growth at around $315 billion and services exports to be about $185 billion in the financial year (FY) 2017-18.

Traders were seen piling up positions in Realty, PSU and Media stocks, while selling was witnessed in IT, FMCG and Financial Services stocks. The top gainers from the F&O segment Titan Company, PVR and Dalmia Bharat. On the other hand, the top losers were Housing Development Finance Corporation, Bharat Financial Inclusion and HCL Technologies. 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 increased by 0.50% and reached 11.55. The 50-share Nifty was up by 27.30 points or 0.30% to settle at 9,265.15.

Nifty April 2017 futures closed at 9286.55 on Wednesday at a premium of 21.40 points over spot closing of 9265.15, while Nifty May 2017 futures ended at 9308.15, at a premium of 43 points over spot closing. Nifty April futures saw a contraction of 0.32 million (mn) units, taking the total outstanding open interest (OI) to 22.03 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 1.35 points at 1416.40 compared with spot closing of 1,415.05. The numbers of contracts traded were 35,781.

Maruti Suzuki India April 2017 futures traded at a premium of 18.10 points at 6353.10 compared with spot closing of 6,335.00. The numbers of contracts traded were 20,570.

State Bank of India April 2017 futures traded at a premium of 0.80 points at 297.80 compared with spot closing of 297.00. The numbers of contracts traded were 20,135.

Larsen & Toubro April 2017 futures traded at a premium of 5.50 points at 1698.50 compared with spot closing of 1,693.00. The numbers of contracts traded were 15,097.

Axis Bank April 2017 futures traded at a premium of 1.35 points at 508.35 compared with spot closing of 507.00. The numbers of contracts traded were 12,692.

Among Nifty calls, 9300 SP from the April month expiry was the most active call with an addition of 0.26 million open interests. Among Nifty puts, 9200 SP from the April month expiry was the most active put with an addition of 0.55 million open interests. The maximum OI outstanding for Calls was at 9500 SP (4.38 mn) and that for Puts was at 9000 SP (5.81 mn). The respective Support and Resistance levels of Nifty are: Resistance 9287.57--- Pivot Point 9251.48--- Support --- 9229.07.

The Nifty Put Call Ratio (PCR) finally stood at 1.05 for April month contract. The top five scrips with highest PCR on OI were Tata Consultancy Services (1.82), MRF (1.75), PVR (1.58), KPIT Technologies (1.49), and Indraprastha Gas (1. 27).

Among most active underlying, Reliance Industries witnessed a contraction of 0.34 million units of Open Interest in the April month futures contract, followed by Maruti Suzuki India witnessing a contraction of 0.04 million units of Open Interest in the April  month contract, State Bank of India witnessed a contraction of 0.15 million units of Open Interest in the April month contract, Larsen & Toubro witnessed a contraction of 0.14 million units of Open Interest in the April  month future contract and Tata Steel witnessed an addition of 4 thousand units of Open Interest in the April  month future contract.