Nifty ends at all time high; crosses over 9300 level

Riding on relief rally from French elections and optimistic quarterly earnings, Indian equity benchmark -- Nifty -- ended the day at all time high on Tuesday. After a gap up opening, there appeared not even an iota of profit booking in the session, as Nifty fervently gained from strength to strength, as investors continued hunt for fundamentally strong stocks. Sentiments remained optimistic with Finance Minister Arun Jaitley’s statement that India will continue to grow at 7-8 per cent rate, an 'absolute normal' for the nation under the current global environment. Jaitley also said as far as the economy is concerned, all the decisions taken by the Modi-Government are consistently in one direction. Some support also came with the report that the commerce and industry ministry is formulating a policy to give preference to locally manufactured goods in government procurement. Furthermore, traders took some encouragement with Revenue Secretary Hasmukh Adhia assuring that the prices of neither goods nor services will see an increase under the goods and services tax (GST) due to higher incidence of tax. Infact, prices of most goods are likely to reduce, while those of services will remain at the same level. He added that GST will reduce the cascading of taxes and help ease inflation. Besides, most of the PSU banking stocks ended higher with the RBI Governor, Urjit Patel’s statement that the Indian banking system could be better off if some public sector banks are consolidated to have fewer but healthier entities, as it would help in dealing with the problem of stressed assets.

All sectoral indices traded in green. The top gainers from the F&O segment were Indian Bank, Biocon and Godrej Consumer Products. On the other hand, the top losers were GMR Infrastructure, Jaiprakash Associates and Reliance Defence & Engineering. In the index option segment, maximum OI continues to be seen in the 9100-9600 calls and 8500-9300 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 4.04% and reached 11.15. The 50-share Nifty was up by 88.65 points or 0.96% to settle at 9,306.60.

Nifty April 2017 futures closed at 9293.90 on Tuesday at a discount of 12.70 points over spot closing of 9,306.60, while Nifty May 2017 futures ended at 9318.00, at a premium of 11.40 points over spot closing. Nifty April futures saw an addition of 0.15 million (mn) units, taking the total outstanding open interest (OI) to 16.77 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 1.15 points at 1432.15 compared with spot closing of 1,431.00. The numbers of contracts traded were 39,580.

Axis Bank April 2017 futures traded at a discount of 3.15 points at 514.95 compared with spot closing of 518.10. The numbers of contracts traded were 32,187.

HDFC Bank April 2017 futures traded at a discount of 12.95 points at 1526.30 compared with spot closing of 1,539.25. The numbers of contracts traded were 31,618.

Infosys April 2017 futures traded at a premium of 0.60 point at 930.20 compared with spot closing of 929.60. The numbers of contracts traded were 30,952.

Bharti Airtel April 2017 futures traded at a discount of 0.25 points at 353.10 compared with spot closing of 353.35. The numbers of contracts traded were 24,451.

Among Nifty calls, 9300 SP from the April month expiry was the most active call with a contraction of 0.14 million open interests. Among Nifty puts, 9200 SP from the April month expiry was the most active put with an addition of 0.40 million open interests. The maximum OI outstanding for Calls was at 9300 SP (3.88 mn) and that for Puts was at 9000 SP (5.22 mn). The respective Support and Resistance levels of Nifty are: Resistance 9327.08--- Pivot Point 9288.72--- Support --- 9268.23.

The Nifty Put Call Ratio (PCR) finally stood at 1.61 for April month contract. The top five scrips with highest PCR on OI were BOSCH (1.71), United Breweries (1.58), Bajaj Finance (1.31), DHFL (1.25) and Bharti Infratel (1.22).

Among most active underlying, Reliance Industries witnessed a contraction of 2.57 million units of Open Interest in the April month futures contract, followed by Axis Bank witnessing a contraction of 5.67 million units of Open Interest in the April  month contract, HDFC Bank witnessed a contraction of 3.97  million units of Open Interest in the April month contract, State Bank of India witnessed a contraction of 7.43 million units of Open Interest in the April  month future contract and Vedanta witnessed a contraction of 8.22 million units of Open Interest in the April  month future contract.