Nifty recovers losses to end marginally higher

Indian equity benchmark --  Nifty --  recovered from early losses to end marginally higher on Friday ahead of the launch of goods and services tax (GST). The market fell in early trade tracking weak global cues. Besides, Asian Development Bank (ADB) said that implementation of Goods and Services Tax (GST) will remain a challenge for the government. ADB also said that there can be some transitional issues like filing of returns & its scrutiny and another issue might be that of enforcement by state and central government tax officials. However, the index saw recovery in late afternoon session as traders took encouragement with Industry body FICCI's report that the rollout of GST will bring about significant gains to India's economy and it looks forward to working with the government for successful implementation of the crucial tax reform. Some support also came with Arun Jaitley’s statement that GST is an efficient and simple system with less corruption, adding that prices should decline after GST is in place July 1, while anticipating some teething troubles. Furthermore, shares of telecom companies traded lower with ICRA's latest report highlighting that intense competition and pricing pressure will continue to take a toll on the telecom sector with industry revenue expected to fall another 6 percent during the current financial year.

Traders were seen piling up positions in FMCG, Pharma and Media stocks, while selling was witnessed in Realty, Financial Services and Auto stocks. The top gainers from the F&O segment were Infibeam Incorporation, BEML and GMR Infrastructure. On the other hand, the top losers were InterGlobe Aviation, Indiabulls Real Estate and Indo Count Industries. 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 increased by 3.07% and reached 11.73. The 50-share Nifty was up by 16.80 points or 0.18% to settle at 9,520.90.

Nifty July 2017 futures closed at 9517.40 on Friday at a discount of 3.50 points over spot closing of 9520.90, while Nifty August 2017 futures ended at 9548.45, at a premium of 27.55 points over spot closing. Nifty July futures saw an addition of 0.13 million (mn) units, taking the total outstanding open interest (OI) to 19.57 million (mn) units. The near month derivatives contract will expire on July 27, 2017.

From the most active contracts, Tata Steel July 2017 futures traded at a discount of 8.30 points at 537.10 compared with spot closing of 545.40. The numbers of contracts traded were 19,827.

ITC July 2017 futures traded at a premium of 1.80 points at 324.80 compared with spot closing of 323.00. The numbers of contracts traded were 13,587.

Sun Pharmaceutical Industries July 2017 futures traded at a premium of 1.10 point at 557.10 compared with spot closing of 556.00. The numbers of contracts traded were 13,095.

Vedanta July 2017 futures traded at a premium of 1.65 points at 250.35 compared with spot closing of 248.70. The numbers of contracts traded were 12,943.

Yes Bank July 2017 futures traded at a premium of 1.65 points at 1467.55 compared with spot closing of 1465.90. The numbers of contracts traded were 12,656.

Among Nifty calls, 9600 SP from the July month expiry was the most active call with an addition of 0.06 million open interests. Among Nifty puts, 9400 SP from the July month expiry was the most active put with an addition of 0.88 million open interests. The maximum OI outstanding for Calls was at 9700 SP (3.52 mn) and that for Puts was at 9400 SP (5.04 mn). The respective Support and Resistance levels of Nifty are: Resistance 9554.88--- Pivot Point 9501.82--- Support --- 9467.83.

The Nifty Put Call Ratio (PCR) finally stood at 1 for July month contract. The top five scrips with highest PCR on OI were SRF (3), Nestle India (3), United Breweries (3), V-Guard Industries (2) and Indraprastha Gas (2).

Among most active underlying, Tata Steel witnessed a contraction of 0.59 million units of Open Interest in the July month futures contract, followed by State Bank of India witnessing an addition of 1.26 million units of Open Interest in the July month contract, ITC witnessed an addition of 3.98 million units of Open Interest in the July month contract, Vedanta witnessed an addition of 2.62 million units of Open Interest in the July month future contract and Reliance Industries witnessed a contraction of 0.26 million units of Open Interest in the July month future contract.