Nifty ends with moderate gains after RBI maintains status quo

After trading firmly in first half of the session, the local benchmark -- Nifty -- witnessed some profit booking in late afternoon trade but managed to end the session with moderate gains on Wednesday as the Reserve Bank of India (RBI) kept the repo rate unchanged at 6.25 per cent. Besides, it expects retail inflation to fall to 2-3.5 per cent in the first half of current fiscal and move up to 4.5 per cent in the second half saying that rush for farm loan waivers may have inflationary spillovers. Sentiments got some support with report that Indian Meteorological Department (IMD) upgraded its monsoon forecast to 98% (with an error margin of +/-4%) of the long period average (LPA) for 2017, from 96% earlier forecasted. It also said that rainfall during the June-September period monsoon season will be normal this year. Furthermore, BMI Research’s report that India is among the top five consumer markets in Asia offering retailers consumer spending growth of an average of 6.1 per cent over the next five years, also helped the market to end higher. It also said that consumer spending in India will maintain strong levels of growth through to 2021, as the country's positive economic outlook continues. Meanwhile, the revenue department has imposed antidumping duty on import of a chemical used in furniture cushion and automobile seats from China, Japan and Korea.

Traders were seen piling up positions in PSU, Pharma and Metal stocks, while selling was witnessed only in IT stocks.  The top gainers from the F&O segment were Cadila Healthcare, Can Fin Homes and Oriental Bank of Commerce. On the other hand, the top losers were Hexaware Technologies, Reliance Communications and United Spirits.  In the index option segment, maximum OI continues to be seen in the 9400-10000 calls and 9000-9700 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 2.18% and reached 10.89. The 50-share Nifty was up by 26.75 points or 0.28% to settle at 9,663.90.

Nifty June 2017 futures closed at 9679.90 on Wednesday at a premium of 16 points over spot closing of 9663.90, while Nifty July 2017 futures ended at 9699.40, at a premium of 35.50 points over spot closing. Nifty June futures saw an addition of 0.44 million (mn) units, taking the total outstanding open interest (OI) to 22.02 million (mn) units. The near month derivatives contract will expire on June 29, 2017.

From the most active contracts, Infosys June 2017 futures traded at a premium of 5.10 points at 964.40 compared with spot closing of 959.30. The numbers of contracts traded were 28,440.

Tata Consultancy Services June 2017 futures traded at a discount of 34.70 points at 2579.25 compared with spot closing of 2613.95. The numbers of contracts traded were 21,015.

ICICI Bank June 2017 futures traded at a discount of 1.55 points at 323.40 compared with spot closing of 324.95. The numbers of contracts traded were 15,577.

Yes Bank June 2017 futures traded at a premium of 8.00 points at 1502.50 compared with spot closing of 1494.50. The numbers of contracts traded were 13,487.

Reliance Industries June 2017 futures traded at a premium of 4 points at 1343.00 compared with spot closing of 1339.00. The numbers of contracts traded were 12,983.

Among Nifty calls, 9700 SP from the June month expiry was the most active call with a contraction of 0.10 million open interests. Among Nifty puts, 9600 SP from the June month expiry was the most active put with an addition of 0.50 million open interests. The maximum OI outstanding for Calls was at 9700 SP (5.10 mn) and that for Puts was at 9500 SP (6.44 mn). The respective Support and Resistance levels of Nifty are: Resistance 9684.78--- Pivot Point 9657.67--- Support --- 9636.78.

The Nifty Put Call Ratio (PCR) finally stood at 1.21 for June month contract. The top five scrips with highest PCR on OI were Kajaria Ceramics (4.00), Amara Raja Batteries (2.61), V-Guard Industries (1.79), HDFC Bank (1.12) and Indraprastha Gas (1.12).

Among most active underlying, Tata Consultancy Services witnessed an addition of 0.43 million units of Open Interest in the June month futures contract, followed by Infosys witnessing an addition of 0.13 million units of Open Interest in the June  month contract, ICICI Bank witnessed an addition of 0.92 million units of Open Interest in the June month contract, State Bank of India witnessed a contraction of 0.87 million units of Open Interest in the June  month future contract and Maruti Suzuki India witnessed an addition of 0.05 million units of Open Interest in the June month future contract.