Nifty closes near record high; PSU Banks lead

Indian equity benchmark -- Nifty -- settled higher for second consecutive session on Thursday. Sentiments remained upbeat with International Monetary Fund’s (IMF’s) statement that India’s growth outlook has improved as the impact of last year’s demonetization exercise seems to be fading and recent key structural reforms continue to pay off. Besides, Finance Minister Arun Jaitley has said that although the government had factored in a huge amount of disruption, the switchover to GST has been smoother than anticipated and noted that implementation of new tax regime along with last year’s demonetization move would increase the tax base ratio over a period of time. Investors also got bullish signals from BMI Research’s latest report that Indian economy is expected to recover in the coming quarters and the country is expected to clock a real GDP growth of 6.9% in this financial year. Meanwhile, the revenue of telecom operators from services dipped by about 15% to Rs 40,831 crore in the January-March quarter this year.

Traders were seen piling up positions in Realty, PSU and FMCG stocks, while selling was witnessed only in IT and Media stocks.  The top gainers from the F&O segment were Indian Bank, Manappuram Finance and Punjab National Bank. On the other hand, the top losers were JSW Energy, Page Industries and Dish TV India. 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 1.52% and reached 10.98. The 50-share Nifty was up by 36.95 points or 0.38% to settle at 9,674.55.

Nifty July 2017 futures closed at 9673.35 on Thursday at a discount of 1.20 points over spot closing of 9674.55, while Nifty August 2017 futures ended at 9707.45, at a premium of 32.90 points over spot closing. Nifty July futures saw a contraction of 0.05 million (mn) units, taking the total outstanding open interest (OI) to 20.29 million (mn) units. The near month derivatives contract will expire on July 27, 2017.

From the most active contracts, State Bank of India July 2017 futures traded at a premium of 0.90 points at 281.75 compared with spot closing of 280.85. The numbers of contracts traded were 16,645.

Punjab National Bank July 2017 futures traded at a discount of 1.95 points at 141.55 compared with spot closing of 143.50. The numbers of contracts traded were 13,405.

DLF July 2017 futures traded at a discount of 0.15 points at 201.60 compared with spot closing of 201.75. The numbers of contracts traded were 11,556.

Yes Bank July 2017 futures traded at a premium of 2.90 points at 1507.00 compared with spot closing of 1504.10. The numbers of contracts traded were 11,396.

Reliance Industries July 2017 futures traded at a discount of 8.30 points at 1433.70 compared with spot closing of 1442.00. The numbers of contracts traded were 10,643.

Among Nifty calls, 9700 SP from the July month expiry was the most active call with a contraction of 0.03 million open interests. Among Nifty puts, 9600 SP from the July month expiry was the most active put with an addition of 0.83 million open interests. The maximum OI outstanding for Calls was at 9700 SP (3.72 mn) and that for Puts was at 9500 SP (6.51 mn). The respective Support and Resistance levels of Nifty are: Resistance 9703.52--- Pivot Point 9671.73--- Support --- 9642.77.

The Nifty Put Call Ratio (PCR) finally stood at 1.31 for July month contract. The top five scrips with highest PCR on OI were Indiabulls Real Estate (1.32), Indraprastha Gas (1.30), TVS Motor Company (1.19), Engineers India (1.19) and Vedanta (1.13).

Among most active underlying, State Bank of India witnessed a contraction of 2.92 million units of Open Interest in the July month futures contract, followed by Maruti Suzuki India witnessing an addition of 0.01 million units of Open Interest in the July month contract, DLF witnessed an addition of 0.26 million units of Open Interest in the July month contract, Tata Steel witnessed an addition of 0.01 million units of Open Interest in the July month future contract and Reliance Industries  witnessed an addition of 0.34 million units of Open Interest in the July month future contract.