Nifty ends at fresh closing high

Starting the week on a strong footing, Indian local benchmark-Nifty-ended at a record high on Monday, as investors took comfort from low inflation and a deluge of foreign fund inflows. The wholesale price index (WPI) for the month of April eased to a four-month low of 3.85% after the government revised the base year for the indices in the new series to 2011-12, against the earlier 2004-05. The consumer price index (CPI) inflation also softened to 2.99% in the first month of the new financial year compared with 3.89% in March and 5.47% in the year earlier. Sentiments got some boost with the Federation of Indian Chambers of Commerce and Industry’s (FICCI) latest report that India's gross domestic product (GDP) growth will be around 7.4% for fiscal 2017-18, with a minimum and maximum level of 7% and 7.6% respectively. Besides, the Reserve Bank of India’s report stating that the introduction of GST will have economy-wide ramifications and holds the best bet for state governments to improve their finances without cutting productive expenditure, also supported the upside. Traders took some encouragement with Union minister Arjun Ram Meghwal’s statement that the country has rapidly moved towards digitisation which has helped keep a check on the shadow economy. He also explained that the move will result in growth of consumption, investments and export and as a result Indian economy will also grow.

Traders were seen piling up positions in Metal, Pharma and Financial Services stocks, while selling was witnessed only in IT stocks. The top gainers from the F&O segment were Piramal Enterprises, GMR Infrastructure and the India Cements. On the other hand, the top losers were Idea Cellular, Glenmark Pharmaceuticals and Suzlon Energy. In the index option segment, maximum OI continues to be seen in the 9200-9700 calls and 8700-9500 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 0.45% and reached 10.67. The 50-share Nifty was up by 44.50 points or 0.47% to settle at 9,445.40.

Nifty May 2017 futures closed at 9453.30 on Monday at a premium of 7.90 points over spot closing of 9445.40, while Nifty June 2017 futures ended at 9452.40, at a premium of 7 points over spot closing. Nifty May futures saw an addition of 0.49 million (mn) units, taking the total outstanding open interest (OI) to 21.11 million (mn) units. The near month derivatives contract will expire on May 25, 2017.

From the most active contracts, Yes Bank May 2017 futures traded at a premium of 4.40 points at 1478.40 compared with spot closing of 1474.00. The numbers of contracts traded were 35,984.

Tata Steel May 2017 futures traded at a premium of 1.05 points at 457.50 compared with spot closing of 456.45. The numbers of contracts traded were 24,230.

Vedanta May 2017 futures traded at a premium of 0.65 points at 241.65 compared with spot closing of 241.00. The numbers of contracts traded were 18,421.

Hindalco Industries May 2017 futures traded at a premium of 0.25 points at 198.95 compared with spot closing of 198.70. The numbers of contracts traded were 14,986.

Axis Bank May 2017 futures traded at a premium of 2.00 points at 502.25 compared with spot closing of 500.25. The numbers of contracts traded were 14,344.

Among Nifty calls, 9500 SP from the May month expiry was the most active call with a contraction of 0.35 million open interests. Among Nifty puts, 9400 SP from the May month expiry was the most active put with an addition of 0.82 million open interests. The maximum OI outstanding for Calls was at 9500 SP (6.72 mn) and that for Puts was at 9300 SP (7.39 mn). The respective Support and Resistance levels of Nifty are: Resistance 9455.40--- Pivot Point 9439.25--- Support --- 9429.25.

The Nifty Put Call Ratio (PCR) finally stood at 1.23 for May month contract. The top five scrips with highest PCR on OI were Infibeam Incorporation (2.18), Eicher Motors (2.13), Hero MotoCorp (1.79), Bharti Airtel (1.58) and CEAT (1.46).

Among most active underlying, Yes Bank witnessed an addition of 0.30 million units of Open Interest in the May month futures contract, followed by Tata Steel witnessing a contraction of 0.96 million units of Open Interest in the May  month contract, Vedanta witnessed a contraction of 0.96 million units of Open Interest in the May month contract, State Bank of India witnessed an addition of 0.89 million units of Open Interest in the May  month future contract and DLF witnessed an addition of 0.42 million units of Open Interest in the May month future contract.