Nifty ends at record high for third straight session

Indian equity benchmark ---Nifty--- continued its upward journey and made a new lifetime high for the third straight session on Wednesday amid sustained optimism among investors on better than expected Q4 earnings and prospects of good rainfall. The index traded dull for most part of the session with the United Nations (UN) report which has lowered India's gross domestic product (GDP) growth forecast for the financial year 2017. As per the UN World Economic Situation and Prospects as of mid- 2017 report, the Indian economy is expected to grow at 7.3 percent in 2017, a downward revision from the 7.7 percent forecast in January. However, the market managed to extend bull run in late deals with taking support from Indian Meteorological Department’s (IMD) statement that the southwest monsoon will hit Kerala on May 30, two days ahead of schedule. Normally, the monsoon season begins on June 1. The onset of southwest monsoon over Kerala signals the arrival of monsoon over the Indian subcontinent. Some support also came with the report that India has overtaken the US to be at second place in this year's 'Renewable energy country attractiveness index' released by EY and this is primarily due to a combination of strong government support and increasingly attractive economics.

Traders were seen piling up positions in AUTO, Metal and Banking stocks, while selling was witnessed in PSU, FMCG and Pharma stocks. The top gainers from the F&O segment were CEAT, Tata Steel and Just Dial. On the other hand, the top losers were Shree Cements, Punjab National Bank and Capital First. In the index option segment, maximum OI continues to be seen in the 9300-9700 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 increased by 0.71% and reached 10.63. The 50-share Nifty was up by 13.50 points or 0.14% to settle at 9,525.75.

Nifty May 2017 futures closed at 9533.75 on Wednesday at a premium of 8 points over spot closing of 9525.75, while Nifty June 2017 futures ended at 9532.85, at a premium of 7.10 points over spot closing. Nifty May futures saw an addition of 0.50 million (mn) units, taking the total outstanding open interest (OI) to 22.24 million (mn) units. The near month derivatives contract will expire on May 25, 2017.

From the most active contracts, Tata Steel May 2017 futures traded at a premium of 1.15 points at 494.55 compared with spot closing of 493.40. The numbers of contracts traded were 76,826.

Punjab National Bank May 2017 futures traded at a premium of 1.00 points at 165.80 compared with spot closing of 164.80. The numbers of contracts traded were 20,052.

Bajaj Finance May 2017 futures traded at a premium of 6.30 points at 1326.30 compared with spot closing of 1320.00. The numbers of contracts traded were 18,706.

ICICI Bank May 2017 futures traded at a premium of 0.15 points at 309.60 compared with spot closing of 309.45. The numbers of contracts traded were 17,612.

Tata Motors May 2017 futures traded at a premium of 1.95 points at 450.85 compared with spot closing of 448.90. The numbers of contracts traded were 17,077.

Among Nifty calls, 9600 SP from the May month expiry was the most active call with an addition of 0.37  million open interests. Among Nifty puts, 9500 SP from the May month expiry was the most active put with an addition of 1.54 million open interests. The maximum OI outstanding for Calls was at 9500 SP (5.24 mn) and that for Puts was at 9300 SP (7.32 mn). The respective Support and Resistance levels of Nifty are: Resistance 9543.53--- Pivot Point 9514.82--- Support --- 9497.03.

The Nifty Put Call Ratio (PCR) finally stood at 1.57 for May month contract. The top five scrips with highest PCR on OI were Eicher Motors (1.85), CEAT (1.81), Bharti Airtel (1.67), Kotak Bank (1.48) and Hero MotoCorp (1.43).

Among most active underlying, Tata Steel witnessed a contraction of 2.48 million units of Open Interest in the May month futures contract, followed by State Bank of India witnessing an addition of 0.64 million units of Open Interest in the May  month contract, ICICI Bank witnessed an addition of 0.42 million units of Open Interest in the May month contract, Tata Motors witnessed an addition of 2.65 million units of Open Interest in the May  month future contract and Punjab National Bank witnessed an addition n of 0.82 million units of Open Interest in the May month future contract.