Nifty ekes out slender gains; ends above 9,600 mark

The domestic equity benchmark -- Nifty -- ended the volatile session in green on Wednesday with small gains ahead of the US Federal Reserve’s interest rate decision. Investors remained optimistic with the report that India’s Wholesale price index (WPI) inflation eased in May as prices of fuel and food articles declined. According to the data released by the ministry of commerce and industry, the WPI with the revised base year of 2011-12 fell to 2.17% in May from 3.85% in April and (-) 0.90% during the corresponding month of the previous year. Some support also came after the Union Cabinet cleared a proposal to introduce a Bill in Parliament for setting up the Resolution Corporation to deal with bankruptcy in banks, insurance companies and financial entities. Besides, the government is working on a new industrial policy to promote and develop frontier technologies, innovation and enhance competitiveness of domestic products. Shares of small-sized public sector undertaking (PSU) banks traded higher on reports that the government is working on consolidation of banks. However, gains remained capped with the private report stating that employer confidence in India has dipped to the least optimistic level since 2005 amid uncertainties in global markets.

Traders were seen piling up positions in Realty, PSU and Media stocks, while selling was witnessed in FMCG, Metal and Financial Services stocks. The top gainers from the F&O segment were Allahabad Bank, Housing Development & Infrastructure and Andhra Bank. On the other hand, the top losers were Escorts, Yes Bank and Cadila Healthcare. 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 1.41% and reached 11.18. The 50-share Nifty was up by 11.25 points or 0.12% to settle at 9,618.15.

Nifty June 2017 futures closed at 9637.60 on Wednesday at a premium of 19.45 points over spot closing of 9618.15, while Nifty July 2017 futures ended at 9656.10, at a premium of 37.95 points over spot closing. Nifty June futures saw a contraction of 0.34 million (mn) units, taking the total outstanding open interest (OI) to 21.43 million (mn) units. The near month derivatives contract will expire on June 29, 2017.

From the most active contracts, Reliance Industries June 2017 futures traded at a discount of 1.10 points at 1358.90 compared with spot closing of 1360.00. The numbers of contracts traded were 29,467.

Yes Bank June 2017 futures traded at a premium of 7.30 points at 1456.30 compared with spot closing of 1449.00. The numbers of contracts traded were 19,962.

ICICI Bank June 2017 futures traded at a discount of 1.30 points at 317.70 compared with spot closing of 319.00. The numbers of contracts traded were 14,361.

State Bank of India June 2017 futures traded at a premium of 1.30 points at 285.70 compared with spot closing of 284.40. The numbers of contracts traded were 10,927.

Reliance Capital June 2017 futures traded at a premium of 3.50 points at 599.10 compared with spot closing of 595.60. The numbers of contracts traded were 10,690.

Among Nifty calls, 9700 SP from the June month expiry was the most active call with a contraction of 0.49 million open interests. Among Nifty puts, 9600 SP from the June month expiry was the most active put with an addition of 0.56 million open interests. The maximum OI outstanding for Calls was at 9700 SP (5.95 mn) and that for Puts was at 9500 SP (7.25 mn). The respective Support and Resistance levels of Nifty are: Resistance 9636.88--- Pivot Point 9608.67--- Support --- 9589.93.

The Nifty Put Call Ratio (PCR) finally stood at 1.18 for June month contract. The top five scrips with highest PCR on OI were Amara Raja Batteries (2.43), Oriental Bank of Commerce (1.91), HDFC Bank (1.22), Kaveri Seed Company (1.09) and Indiabulls Real Estate (1.08).

Among most active underlying, Reliance Industries witnessed a contraction of 0.84 million units of Open Interest in the June month futures contract, followed by Yes Bank witnessing an addition of 1.06 million units of Open Interest in the June  month contract, ICICI Bank witnessed a contraction of 0.23 million units of Open Interest in the June month contract, Tata Steel  witnessed an addition of 0.09 million units of Open Interest in the June  month future contract and State Bank of India witnessed an addition of 0.26 million units of Open Interest in the June month future contract.