Nifty snaps 2 day losing streak; reclaims 9,500 mark

With bulls staging a strong comeback, the local benchmark -- Nifty -- snapped its two day losing streak on Thursday and ended on a higher note. Sentiments remained optimistic with report that the Union Cabinet approved a policy providing preference to domestically manufactured goods for government procurements, in a major step to boost the government’s Make in India initiative. It also approved dismantling of the two-decade-old Foreign Investment Promotion Board (FIPB) and defined a new mechanism to approve overseas investment applications and hasten fund flows. The move will avoid the need for multiple clearances. Market sentiments also got a boost after the global markets rose taking a cue from Wall Street as minutes from the Federal Reserve’s latest policy meeting pointed at a June rate hike and indicated healthy US economy. Furthermore, FICCI’s report that new public procurement policy is a legitimate tool under multilateral commitments and will promote value addition, drive manufacturing and create additional jobs in the country, also contributed to the rally.

Traders were seen piling up positions in Banking, Financial Services and IT stocks, while selling was witnessed only in Pharma stocks. The top gainers from the F&O segment were Sintex Industries, Jaiprakash Associates and Jain Irrigation Systems. On the other hand, the top losers were Dish TV India, Lupin and Dr. Reddy's Laboratories. In the index option segment, maximum OI continues to be seen in the 9300-9800 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 11.69% and reached 10.44. The 50-share Nifty was up by 149.20 points or 1.59% to settle at 9,509.75.

Nifty June 2017 futures closed at 9495.90 on Thursday at a discount of 13.85 points over spot closing of 9509.75, while Nifty July 2017 futures ended at 9509.60, at a discount of 0.15 points over spot closing. Nifty June futures saw an addition of 5.17 million (mn) units, taking the total outstanding open interest (OI) to 19.10 million (mn) units. The near month derivatives contract will expire on June 29, 2017.

From the most active contracts, HDFC Bank June 2017 futures traded at a discount of 18.80 points at 1594.45 compared with spot closing of 1613.25. The numbers of contracts traded were 40,434.

ICICI Bank June 2017 futures traded at a discount of 1.40 points at 315.45 compared with spot closing of 316.85. The numbers of contracts traded were 30,380.

Reliance Industries June 2017 futures traded at a premium of 6.85 points at 1308.35 compared with spot closing of 1,301.50. The numbers of contracts traded were 26,549.

Yes Bank June 2017 futures traded at a premium of 4.35 points at 1460.35 compared with spot closing of 1456.00. The numbers of contracts traded were 21,518.

Axis Bank June 2017 futures traded at a premium of 1.30 points at 509.15 compared with spot closing of 507.85. The numbers of contracts traded were 20,853.

Among Nifty calls, 9500 SP from the June month expiry was the most active call with an addition of 0.63 million open interests. Among Nifty puts, 9400 SP from the June month expiry was the most active put with an addition of 1.42 million open interests. The maximum OI outstanding for Calls was at 9600 SP (3.39 mn) and that for Puts was at 9300 SP (3.80 mn). The respective Support and Resistance levels of Nifty are: Resistance 9562.30--- Pivot Point 9470.75--- Support --- 9418.20.

The Nifty Put Call Ratio (PCR) finally stood at 1.04 for June month contract. The top five scrips with highest PCR on OI were Torrent Pharmaceuticals (3.00), V-Guard Industries (3.00), Indraprastha Gas (2.21), Colgate-Palmolive (India) (2.00) and Aditya Birla Nuvo (1.97).

Among most active underlying, ICICI Bank witnessed an addition of 25.08 million units of Open Interest in the June month futures contract, followed by HDFC Bank witnessing an addition of 8.10 million units of Open Interest in the June  month contract, State Bank of India witnessed an addition of 12.18 million units of Open Interest in the June month contract, Reliance Industries witnessed an addition of 6.71 million units of Open Interest in the June  month future contract and Tata Steel witnessed an addition of 11.81 million units of Open Interest in the June month future contract.