Nifty pare losses to end flat

Indian equity benchmark -- Nifty -- pared most of its losses to end marginally in red on Thursday, after the Reserve Bank of India (RBI) decided to keep the repo rate unchanged at 6.25% in line with the market expectations. Investors got some confidence after central bank projected India's growth to strengthen to 7.4% in 2017-18 from 6.7% in 2016-17. Further, RBI projected inflation to average around 4.5% in the first half of 2017-18 and 5% in the second half. Some support also came with the report that country's service sector registered second straight month of growth in March, driven by strong rise in new work orders. The Nikkei India Services Purchasing Managers' Index (PMI), which tracks the services sector output on a monthly basis, rose from 50.3 in February to 51.5 in March. However, market participants remained cautious after the Federal Reserve's minutes from March meeting showed that Fed officials want to start unwinding the central bank's massive $4.5 trillion balance sheet later this year. Meanwhile, shares of some railway related companies traded higher after the government approved the formation of an independent rail regulatory authority (RDA) to determine tariffs ensuring fair play and level playing field for private players keen on investment in the railways.

Traders were seen piling up positions in Realty, Metal and Media stocks, while selling was witnessed in FMCG, PSU and Pharma stocks. The top gainers from the F&O segment Jindal Steel & Power, Adani Power and Bharat Heavy Electricals. On the other hand, the top losers were Muthoot Finance, Just Dial and Jubilant Foodworks. 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 2.25% and reached 11.29. The 50-share Nifty was down by 3.20 points or 0.03% to settle at 9,261.95.

Nifty April 2017 futures closed at 9272.25 on Thursday at a premium of 10.30 points over spot closing of 9261.95, while Nifty May 2017 futures ended at 9295.30, at a premium of 33.35 points over spot closing. Nifty April futures saw a contraction of 0.69 million (mn) units, taking the total outstanding open interest (OI) to 21.34 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 4.10 points at 1438.10 compared with spot closing of 1,434.00. The numbers of contracts traded were 44,448.

State Bank of India April 2017 futures traded at a premium of 2 points at 294.25 compared with spot closing of 292.25. The numbers of contracts traded were 19,879.

Bharat Financial Inclusion April 2017 futures traded at a premium of 7.25 points at 777.20 compared with spot closing of 769.95. The numbers of contracts traded were 18,012.

Axis Bank April 2017 futures traded at a premium of 1.85 points at 509.85 compared with spot closing of 508.00. The numbers of contracts traded were 16,037.

DLF April 2017 futures traded at a premium of 0.50 points at 157.20 compared with spot closing of 156.70. The numbers of contracts traded were 15,969.

Among Nifty calls, 9300 SP from the April month expiry was the most active call with an addition of 0.46 million open interests. Among Nifty puts, 9200 SP from the April month expiry was the most active put with an addition of 0.11 million open interests. The maximum OI outstanding for Calls was at 9500 SP (4.52 mn) and that for Puts was at 9000 SP (5.88 mn). The respective Support and Resistance levels of Nifty are: Resistance 9280.32--- Pivot Point 9249.58--- Support --- 9231.22.

The Nifty Put Call Ratio (PCR) finally stood at 1.08 for April month contract. The top five scrips with highest PCR on OI were Tata Consultancy Services (1.69), NIIT Technologies (1.58), PVR (1.42), Indraprastha Gas (1. 31) and Max Financial Services (1.19)

Among most active underlying, Reliance Industries witnessed a contraction of 0.67 million units of Open Interest in the April month futures contract, followed by State Bank of India witnessing an addition of 4.41 million units of Open Interest in the April  month contract, Tata Steel witnessed an addition of 0.26 million units of Open Interest in the April month contract, Bharat Financial Inclusion witnessed an addition of 2.28 million units of Open Interest in the April  month future contract and DLF witnessed an addition of 4.02 million units of Open Interest in the April  month future contract.