Nifty erases all losses to end in green

Indian equity benchmark -- Nifty -- recouped all its early losses to end the last day of the week in green, shrugging off the shock outcome in the UK election. Covering-up of short positions by bears supported the late recovery in stocks, helping wipe off initial losses. The market traded on a bearish note for most part of the day as investors remained cautious with Reserve Bank of India’s (RBI) latest report that the Indian economy will gradually consolidate growth in the financial year 2017-18. It also reported that real gross domestic product (GDP) and real gross value added (GVA) are expected to increase by 7.4 percent and 7.2 percent, respectively, in the current fiscal and consolidate further by 40 basis points (bps) and 50 bps, respectively in the next fiscal. The depreciating rupee against the US dollar also added to the dampened sentiments. However, some support came with UN trade report that despite stagnant foreign direct investment (FDI) inflow of $44 billion in 2016, India will most likely remain most favoured destination due to its attractiveness among MNCs for cross-border mergers and acquisitions. Besides, India Met Department (IMD) has said that a low-pressure area would form in the Bay of Bengal in the next two days, boosting prospects of accelerated progress of the monsoon.

Traders were seen piling up positions in Realty, Metal and Auto stocks, while selling was witnessed in FMCG, IT and Media stocks.  The top gainers from the F&O segment were NHPC, Page Industries and NCC. On the other hand, the top losers were United Breweries, Max Financial Services and Jaiprakash Associates. 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 1.85% and reached 10.86. The 50-share Nifty was up by 21.00 points or 0.22% to settle at 9,668.25.

Nifty June 2017 futures closed at 9682.90 on Friday at a premium of 14.65 points over spot closing of 9,668.25, while Nifty July 2017 futures ended at 9702.20, at a premium of 33.95 points over spot closing. Nifty June futures saw a contraction of 0.18 million (mn) units, taking the total outstanding open interest (OI) to 21.99 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 4.30 points at 953.30 compared with spot closing of 949.00. The numbers of contracts traded were 22,482.

Vedanta June 2017 futures traded at a premium of 1.70 points at 245.95 compared with spot closing of 244.25. The numbers of contracts traded were 20,354.

Maruti Suzuki India June 2017 futures traded at a premium of 1.00 point at 7475.90 compared with spot closing of 7474.90. The numbers of contracts traded were 18,369.

Tata Steel June 2017 futures traded at a premium of 1.65 points at 508.65 compared with spot closing of 507.00. The numbers of contracts traded were 16,244.

Reliance Industries June 2017 futures traded at a premium of 6.00 points at 1338.95 compared with spot closing of 1332.95. The numbers of contracts traded were 14,146.

Among Nifty calls, 9700 SP from the June month expiry was the most active call with an addition of 0.06 million open interests. Among Nifty puts, 9600 SP from the June month expiry was the most active put with an addition of 0.35 million open interests. The maximum OI outstanding for Calls was at 9700 SP (5.61 mn) and that for Puts was at 9500 SP (6.57 mn). The respective Support and Resistance levels of Nifty are: Resistance 9693.62--- Pivot Point 9650.88--- Support --- 9625.52.

The Nifty Put Call Ratio (PCR) finally stood at 1.22 for June month contract. The top five scrips with highest PCR on OI were Amara Raja Batteries (2.57), Oriental Bank of Commerce (1.79), Maruti Suzuki India (1.55), HDFC Bank (1.34) and The Ramco Cements (1.14).

Among most active underlying, Maruti Suzuki India witnessed an addition of 0.06 million units of Open Interest in the June month futures contract, followed by Tata Steel witnessing a contraction of 0.57 million units of Open Interest in the June  month contract, Vedanta witnessed an addition of 1.31 million units of Open Interest in the June month contract, Infosys witnessed an addition of 0.25 million units of Open Interest in the June  month future contract and Reliance Industries witnessed an addition of 0.21 million units of Open Interest in the June month future contract.