Nifty manages to end at record closing high

Indian equity benchmark -- Nifty -- managed to end at fresh record closing high on Tuesday despite erasing most of its gains in last hour of trade due to profit booking. The index after a strong start crossed 9,800 level in the morning for the first time on the back of higher global markets along with optimism over first-quarter earnings season. Investors took encouragement with India Meteorological Department’s (IMD’s) statement that the seasonal monsoon rains have covered most of India and the amount of precipitation so far is within expectations, raising hopes for higher farm output after increased sowing of rice and soybean crops. Besides, Revenue Secretary Hasmukh Adhia said that the Goods and Services Tax (GST) will help bring down the inflation by one to two per cent by the end of this year. He also said that the government’s objective is to ensure that inflation does not increase, and added that the government has tried to keep items frequently used by the consumers under the lower tax bracket. However, the market pared most of its earlier gains after global equities reversed an early gain following weak crude prices. Sentiments were also jittery as investors awaited testimony from Federal Reserve Chair Janet Yellen for clues on when the central bank would tighten U.S. monetary policy.

Traders were seen piling up positions only in IT and Auto stocks, while selling was witnessed in Realty, PSU and Pharma stocks. The top gainers from the F&O segment were Indraprastha Gas, NIIT Technologies and Jindal Steel & Power.  On the other hand, the top losers were The South Indian Bank, Jaiprakash Associates and IDFC Bank.  In the index option segment, maximum OI continues to be seen in the 9500-10000 calls and 9000-9800 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 0.21% and reached 10.89. The 50-share Nifty was up by 15.00 points or 0.15% to settle at 9,786.05.

Nifty July 2017 futures closed at 9787.25 on Tuesday at a premium of 1.20 points over spot closing of 9786.05, while Nifty August 2017 futures ended at 9821.55, at a premium of 35.50 points over spot closing. Nifty July futures saw an addition of 0.35 million (mn) units, taking the total outstanding open interest (OI) to 20.43 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 1.05 points at 979.65 compared with spot closing of 978.60. The numbers of contracts traded were 22,559.

Tata Motors July 2017 futures traded at a premium of 0.05 points at 456.60 compared with spot closing of 456.55. The numbers of contracts traded were 16,096.

Tata Consultancy Services July 2017 futures traded at a discount of 10.40 points at 2472.10 compared with spot closing of 2482.50. The numbers of contracts traded were 15,416.

Reliance Industries July 2017 futures traded at a discount of 11.65 points at 1484.85 compared with spot closing of 1496.50. The numbers of contracts traded were 15,194.

HDFC Bank July 2017 futures traded at a premium of 4.15 points at 1680.30 compared with spot closing of 1676.15. The numbers of contracts traded were 14,700.

Among Nifty calls, 9800 SP from the July month expiry was the most active call with an addition of 0.22 million open interests. Among Nifty puts, 9800 SP from the July month expiry was the most active put with an addition of 1.88 million open interests. The maximum OI outstanding for Calls was at 9800 SP (4.24 mn) and that for Puts was at 9600 SP (7.41 mn). The respective Support and Resistance levels of Nifty are: Resistance 9817.78--- Pivot Point 9798.32--- Support --- 9766.58.

The Nifty Put Call Ratio (PCR) finally stood at 1.39 for July month contract. The top five scrips with highest PCR on OI were Indiabulls Real Estate (1.30), Engineers India (1.17), Ujjivan Financial Services (1.02), BOSCH (1) and Vedanta (0.96).

Among most active underlying, IndusInd Bank witnessed an addition of 0.42 million units of Open Interest in the July month futures contract, followed by State Bank of India witnessing a contraction of 0.35 million units of Open Interest in the July month contract, Reliance Industries witnessed a contraction of 0.06 million units of Open Interest in the July month contract, Tata Motors witnessed a contraction of 1.00 million units of Open Interest in the July month future contract and Infosys witnessed a contraction of 1.27 million units of Open Interest in the July month future contract.