Nifty pares early gains but manages to end at fresh all time high

After opening at yet another peak, the local equity benchmark -- Nifty -- pared early gains and ended with marginal gains amid weakness in European counters. Still, today's closing was fresh all time high for the market. The optimism brought in by Indian Meteorological Department’s (IMD) forecast of normal monsoon this year, kept the sentiments positive. The market participants took encouragement with the report that Prime Minister Narendra Modi is setting up a task force under the chairmanship of the Vice Chairman of NITI Aayog Dr Arvind Panagriya, with an aim to create policies on employment based on credible data. The Prime Minister has directed that this task be expedited so that policies on employment can be formulated with a proper appreciation of impacts, based on credible data. Some support also came with the private report that average crude oil prices will be around $45 for the next half of this year and this coupled with positive macro fundamentals, could translate into better growth numbers for the country. Furthermore, Icra’s latest report said that securitisation transactions rose 34% in FY17 to Rs 90,000 crore on the back of a strong growth in priority sector qualifying assets. However, market participants booked their profit in last leg of trade which dragged Nifty near neutral lines amid plunging bank credit growth. Credit growth of banks dropped to 4.32% in the fortnight to April 28. This is much lower than the 63-year low level of 5.08% in the financial year 2016-17. As per the Reserve Bank of India data, in the reporting fortnight, credit growth of banks crashed down to Rs 7,545 crore as compared to Rs 7,232 crore last year.

Traders were seen piling up positions in Media, PSU and Auto stocks, while selling was witnessed in Banking and Financial Services stocks. The top gainers from the F&O segment were United Spirits, Godfrey Phillips India and Dalmia Bharat. On the other hand, the top losers were Siemens, Arvind and Balkrishna Industries. In the index option segment, maximum OI continues to be seen in the 9200-9700 calls and 8800-9500 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 1.00% and reached 10.83. The 50-share Nifty was up by 15.10 points or 0.16% to settle at 9,422.40.

Nifty May 2017 futures closed at 9439.85 on Thursday at a premium of 17.45 points over spot closing of 9422.40, while Nifty June 2017 futures ended at 9438.55, at a premium of 16.15 points over spot closing. Nifty May futures saw an addition of 0.47 million (mn) units, taking the total outstanding open interest (OI) to 21.13 million (mn) units. The near month derivatives contract will expire on May 25, 2017.

From the most active contracts, Axis Bank May 2017 futures traded at a premium of 2.85 points at 518.25 compared with spot closing of 515.40. The numbers of contracts traded were 21,347.

United Spirits May 2017 futures traded at a premium of 5.90 points at 2139.90 compared with spot closing of 2,134.00. The numbers of contracts traded were 16,808.

Hindalco Industries May 2017 futures traded at a premium of 1.10 points at 194.55 compared with spot closing of 193.45. The numbers of contracts traded were 16,150.

State Bank of India May 2017 futures traded at a premium of 0.85 points at 298.55 compared with spot closing of 297.70. The numbers of contracts traded were 15,684.

DLF May 2017 futures traded at a premium of 0.80 points at 203.55 compared with spot closing of 202.75. The numbers of contracts traded were 13,497.

Among Nifty calls, 9500 SP from the May month expiry was the most active call with an addition of 0.16 million open interests. Among Nifty puts, 9400 SP from the May month expiry was the most active put with an addition of 0.67 million open interests. The maximum OI outstanding for Calls was at 9500 SP (6.68 mn) and that for Puts was at 9300 SP (7.62 mn). The respective Support and Resistance levels of Nifty are: Resistance 9444.93--- Pivot Point 9428.12--- Support --- 9405.58.

The Nifty Put Call Ratio (PCR) finally stood at 1.25for May month contract. The top five scrips with highest PCR on OI were Infibeam Incorporation (2.39), Eicher Motors (1.31), Bharti Airtel (1.78), Britannia Industries (1.47) and Hero MotoCorp (1.45).

Among most active underlying, State Bank of India witnessed a contraction of 2.16 million units of Open Interest in the May month futures contract, followed by Axis Bank witnessing an addition of 8.40 thousand units of Open Interest in the May  month contract, DLF witnessed an addition of 0.85 million units of Open Interest in the May month contract, Reliance Industries witnessed a contraction of 0.07 million units of Open Interest in the May  month future contract and Hero MotoCorp witnessed an addition of 0.16 million units of Open Interest in the May month future contract.