Nifty soars to end near highest point of day

Indian equity benchmark -- Nifty -- made a spectacular rally of 94 points and closed the session near its highest point of the day on Monday, cheering the launch of the country's biggest indirect tax reform, the Goods and Services Tax (GST) that kicked in from July 1. Sentiments remained positive throughout the day with the Moody's Investors Service latest report that the new tax regime will be positive for India’s rating as it will lead to higher government revenue generation and improve the country’s economic growth. Besides, the government ramped up capital spending by nearly 60% in the first two months of the current financial year, in a bid to perk up investment sentiments and crowd in private investment, also supported market sentiments. Some support also came with industry body CII’s statement that the GST rollout will impart major competitiveness to Indian industry, incentivise exports and help expand the tax net. It said the implementation of the crucial tax reform gives tremendous confidence to the industry that the government will continue to facilitate investments and simplify the business environment. Moreover, shares of fertilizer companies ended higher as GST Council lowered the rate on fertilizer from 12% to 5% and on tractor parts from 28% to 18%.

All the indices ended in the green. The top gainers from the F&O segment were Gujarat State Fertilizers & Chemicals, Ashok Leyland and Jubilant Foodworks. On the other hand, the top losers were Jaiprakash Associates, DCB Bank and NIIT Technologies. 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 4.54% and reached 11.20. The 50-share Nifty was up by 94.10 points or 0.99% to settle at 9,615.00.

Nifty July 2017 futures closed at 9621.80 on Monday at a premium of 6.80 points over spot closing of 9615.00, while Nifty August 2017 futures ended at 9651.60, at a premium of 36.60 points over spot closing. Nifty July futures saw an addition of 0.19 million (mn) units, taking the total outstanding open interest (OI) to 19.76 million (mn) units. The near month derivatives contract will expire on July 27, 2017.

From the most active contracts, ITC July 2017 futures traded at a premium of 0.45 points at 343.25 compared with spot closing of 342.80. The numbers of contracts traded were 20,180.

Yes Bank July 2017 futures traded at a premium of 6.05 points at 1497.05 compared with spot closing of 1491.00. The numbers of contracts traded were 15,651.

Ashok Leyland July 2017 futures traded at a discount of 1.10 point at 99.45 compared with spot closing of 100.55. The numbers of contracts traded were 14,977.

Infosys July 2017 futures traded at a premium of 3.05 points at 956.65 compared with spot closing of 953.60. The numbers of contracts traded were 11,811.

Reliance Industries July 2017 futures traded at a discount of 5.95 points at 1378.05 compared with spot closing of 1384.00. The numbers of contracts traded were 11,539.

Among Nifty calls, 9600 SP from the July month expiry was the most active call with an addition of 0.86 million open interests. Among Nifty puts, 9500 SP from the July month expiry was the most active put with an addition of 1.01 million open interests. The maximum OI outstanding for Calls was at 9800 SP (3.43 mn) and that for Puts was at 9400 SP (5.54 mn). The respective Support and Resistance levels of Nifty are: Resistance 9644.82--- Pivot Point 9594.18--- Support --- 9564.37.

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

Among most active underlying, ITC witnessed an addition of 5.57 million units of Open Interest in the July month futures contract, followed by Maruti Suzuki India witnessing an addition of 0.04 million units of Open Interest in the July month contract, Ashok Leyland witnessed an addition of 9.26 million units of Open Interest in the July month contract, Tata Steel witnessed a contraction of 0.14 million units of Open Interest in the July month future contract and Reliance Industries witnessed an addition of 0.14million units of Open Interest in the July month future contract.