Nifty ends flat; holds 9300 mark

Indian equity benchmark -- Nifty -- ended the choppy session flat on Tuesday as investors booked some profits in recent outperformers and looked ahead to quarterly earnings from Bharti Airtel and Hero MotoCorp for further direction. Investors’ sentiments remained optimistic with the International Monetary Fund’s (IMF) report that India’s growth is expected to rebound to 7.2 percent in the financial year 2017-18 and to further 7.7 percent in fiscal 2018-19, following disruptions caused by demonetization. It said that the temporary disruptions (primarily to private consumption) caused by cash shortages accompanying the currency exchange initiative are expected to gradually dissipate in 2017 as cash shortages ease. Sentiments got some support with the report that Mutual fund (MF) industry’s asset base has crossed the Rs 19 lakh crore mark in April on the back of fresh inflows in equity, debt and money market segments. The assets under management (AUM) of the MF industry, comprising 42 players, rose to an all-time high of Rs 19.26 lakh crore at the end of April from Rs 17.55 lakh crore at the end of March. However, upside remained capped as investors remained cautious over Moody’s report that the government’s ordinance on bad loans resolution is credit positive, but does not address the key structural issues plaguing the banking sector and it will be a relatively long drawn process. Subdued trend seen in Asian markets as investors searched for the next catalyst following France's presidential election, also capped gains in the domestic market.

Traders were seen piling up positions in Realty, IT and Metal stocks, while selling was witnessed in PSU, Media and Pharma stocks. The top gainers from the F&O segment were CG Power and Industrial Solutions, Godrej Consumer Products and Siemens. On the other hand, the top losers were Canara Bank, Union Bank of India and Hero MotoCorp. In the index option segment, maximum OI continues to be seen in the 9200-9700 calls and 8500-9400 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 4.74% and reached 11.11. The 50-share Nifty was up by 2.80 points or 0.03% to settle at 9,316.85.

Nifty May 2017 futures closed at 9350.40 on Tuesday at a premium of 33.55 points over spot closing of 9316.85, while Nifty June 2017 futures ended at 9349.30, at a premium of 32.45 points over spot closing. Nifty May futures saw an addition of 0.33 million (mn) units, taking the total outstanding open interest (OI) to 19.37 million (mn) units. The near month derivatives contract will expire on May 25, 2017.

From the most active contracts, ICICI Bank May 2017 futures traded at a premium of 1.45 points at 302.05 compared with spot closing of 300.60. The numbers of contracts traded were 16,436.

Canara Bank May 2017 futures traded at a discount of 1.60 points at 371.60 compared with spot closing of 373.20. The numbers of contracts traded were 14,782.

State Bank of India May 2017 futures traded at a premium of 1.05 points at 297.45 compared with spot closing of 296.40. The numbers of contracts traded were 14,597.

Reliance Industries May 2017 futures traded at a premium of 7.20 points at 1337.20 compared with spot closing of 1,330.00. The numbers of contracts traded were 14,074.

Axis Bank May 2017 futures traded at a premium of 0.25 points at 519.30 compared with spot closing of 519.05. The numbers of contracts traded were 13,995.

Among Nifty calls, 9400 SP from the May month expiry was the most active call with an addition of 0.07 million open interests. Among Nifty puts, 9300 SP from the May month expiry was the most active put with an addition of 0.72 million open interests. The maximum OI outstanding for Calls was at 9400 SP (5.82 mn) and that for Puts was at 9300 SP (6.06 mn). The respective Support and Resistance levels of Nifty are: Resistance 9334.63--- Pivot Point 9321.17--- Support --- 9303.38.

The Nifty Put Call Ratio (PCR) finally stood at 1.04 for May month contract. The top five scrips with highest PCR on OI were Infibeam Incorporation (2.76), Balkrishna Industries (1.29), Britannia Industries (1.28), Bharti Airtel (1.19) and Eicher Motors (1.08).

Among most active underlying, Canara Bank witnessed an addition of 1.34 million units of Open Interest in the May month futures contract, followed by ICICI Bank witnessing a contraction of 0.53 million units of Open Interest in the May  month contract, State Bank of India witnessed an addition of 1.56 million units of Open Interest in the May month contract, DLF witnessed a contraction of 0.88 million units of Open Interest in the May  month future contract and Reliance Industries witnessed an addition of 0.99 million units of Open Interest in the May month future contract.