Nifty snaps six-day losing streak; manages to end above 9500 mark

Indian equity benchmark -- Nifty -- pared most of its early gains to close flat with a positive bias on Thursday, as investors squared off positions on the expiry of June series futures & options contracts. Fitch Ratings in its latest report raised concerns over the recent spate of declarations of farm loan waivers across the country, adding that these moves could have a significant impact on state government finances and might undermine efforts to bring down general government debt. The rating agency noted that the farm loan waivers will also lead to further fiscal slippage at the state level or will reduce the funds available for public investment. However, the index managed to close in green with taking support from the private report stating that India's GDP growth witnessed a trough in January-March quarter, but going forward the economy is expected to see gradual improvement in growth numbers primarily driven by consumption. The report added that consumption has recovered from the demonetization shock and while external demand may be down, it remains supportive of growth. Besides, investments in domestic capital markets via participatory notes (P-notes) have surprisingly surged to a seven-month high of Rs 1.81 lakh crore at the end of May, also aided the sentiments.

Traders were seen piling up positions in Metal, Realty and Media stocks, while selling was witnessed in PSU, Pharma and Auto stocks. The top gainers from the F&O segment were Jaiprakash Associates, Reliance Communications and Dish TV India. On the other hand, the top losers were Havells India, Page Industries and Tata Motors. In the index option segment, maximum OI continues to be seen in the 9500-10000 calls and 9000-9600 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 5.07% and reached 11.38. The 50-share Nifty was up by 12.85 points or 0.14% to settle at 9,504.10.

Nifty July 2017 futures closed at 9519.10 on Thursday at a premium of 15 points over spot closing of 9504.10, while Nifty August 2017 futures ended at 9555.65, at a premium of 51.55 points over spot closing. Nifty July futures saw an addition of 4.70 million (mn) units, taking the total outstanding open interest (OI) to 19.44 million (mn) units. The near month derivatives contract will expire on July 27, 2017.

From the most active contracts, Infosys July 2017 futures traded at a premium of 5.80 points at 934.80 compared with spot closing of 929.00. The numbers of contracts traded were 34,074.

Axis Bank July 2017 futures traded at a discount of 2.35 points at 508.35 compared with spot closing of 510.70. The numbers of contracts traded were 23,931.

HDFC Bank July 2017 futures traded at a premium of 6.40 point at 1661.40 compared with spot closing of 1655.00. The numbers of contracts traded were 21,355.

Yes Bank July 2017 futures traded at a premium of 7.40 points at 1445.40 compared with spot closing of 1438.00. The numbers of contracts traded were 18,635.

Among Nifty calls, 9600 SP from the July month expiry was the most active call with an addition of 0.45 million open interests. Among Nifty puts, 9500 SP from the July month expiry was the most active put with an addition of 1.14 million open interests. The maximum OI outstanding for Calls was at 9700 SP (2.71 mn) and that for Puts was at 9400 SP (4.16 mn). The respective Support and Resistance levels of Nifty are: Resistance 9555.33--- Pivot Point 9524.57--- Support --- 9473.33.

The Nifty Put Call Ratio (PCR) finally stood at 1 for July month contract. The top five scrips with highest PCR on OI were Infibeam Incorporation (6.00), Torrent Pharmaceuticals (5.00), SRF (3.71), Nestle India (3.00) and InterGlobe Aviation (2.62).

Among most active underlying, Tata Steel witnessed an addition of 8.16 million units of Open Interest in the July month futures contract, followed by State Bank of India witnessing an addition of 20.38 million units of Open Interest in the July month contract, Axis Bank witnessed an addition of 8.10 million units of Open Interest in the July month contract, Reliance Industries witnessed an addition of 3.16 million units of Open Interest in the July month future contract and Vedanta witnessed an addition of 17.36 million units of Open Interest in the July month future contract.