Nifty closes at new peak on rate cut hopes

Bulls continued to exercise tight control over bears with the local benchmark -- Nifty -- ending the session at fresh record closing high on Thursday. The market traded on a firm note throughout the day on firm macro-economic data, following a strong buzz that a policy rate cut may be on the anvil after inflation touched a record low. India’s retail inflation cooled down to 1.54% in June from 2.18% in May, while industrial output grew 1.7% in May on a yearly basis after expanding revised 2.8% in April. Some support also came with Fitch Ratings’ report that the global sovereign credit cycle is likely to turn less negative in 2017 as the global GDP growth forecast for 2017 and 2018 had improved. Besides, India’s overseas shipments to top 10 destinations worldwide which include the countries like US, Japan, Hong Kong and UAE have gained strength in the passing financial year. According to the industry body, PHDCCI, the country’s share of exports to top 10 destinations grew to 51.6% in the financial year 2016-17 from 49% in the financial year 2013-14. Traders also took some encouragement from the largest oil producing bloc OPEC's monthly report which highlighted that India’s economic growth will accelerate to 7.5% in the next year 2018, widening the lead over China, whose economic expansion will slow further to 6.2%.

All the sectoral indices on NSE ended in the green. The top gainers from the F&O segment were Sintex Industries, National Aluminium Company and TV18 Broadcast. On the other hand, the top losers were Indian Oil Corporation, Reliance Defence and Engineering and Hexaware Technologies.  In the index option segment, maximum OI continues to be seen in the 9500-10100 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 increased by 1.76% and reached 11.24. The 50-share Nifty was up by 75.60 points or 0.77% to settle at 9,891.70.

Nifty July 2017 futures closed at 9887.50 on Thursday at a discount of 4.20 points over spot closing of 9891.70, while Nifty August 2017 futures ended at 9918.50, at a premium of 26.80 points over spot closing. Nifty July futures saw an addition of 0.85 million (mn) units, taking the total outstanding open interest (OI) to 21.70 million (mn) units. The near month derivatives contract will expire on July 27, 2017.

From the most active contracts, Yes Bank July 2017 futures traded at a premium of 1.55 points at 1582.65 compared with spot closing of 1581.10. The numbers of contracts traded were 24,381.

Infosys July 2017 futures traded at a premium of 0.15 points at 980.15 compared with spot closing of 980.00. The numbers of contracts traded were 17,901.

Reliance Industries July 2017 futures traded at a premium of 2.70 points at 1521.30 compared with spot closing of 1518.60. The numbers of contracts traded were 16,984.

ICICI Bank July 2017 futures traded at a premium of 1.10 points at 298.65 compared with spot closing of 297.55. The numbers of contracts traded were 16,270.

Sintex Industries July 2017 futures traded flat compared with spot closing of 34.20. The numbers of contracts traded were 15,142.

Among Nifty calls, 9900 SP from the July month expiry was the most active call with an addition of 0.75 million open interests. Among Nifty puts, 9800 SP from the July month expiry was the most active put with an addition of 1.13 million open interests. The maximum OI outstanding for Calls was at 10000 SP (4.44 mn) and that for Puts was at 9600 SP (6.34 mn). The respective Support and Resistance levels of Nifty are: Resistance 9908.15--- Pivot Point 9880.80--- Support --- 9864.35.
The Nifty Put Call Ratio (PCR) finally stood at 1.54 for July month contract. The top five scrips with highest PCR on OI were Indiabulls Real Estate (1.40), Yes Bank (1.27), Ujjivan Financial Services (1.15), Engineers India (1.08) and Vedanta (1.03).

Among most active underlying, Reliance Industries witnessed an addition of 0.21 million units of Open Interest in the July month futures contract, followed by Yes Bank witnessing a contraction of 0.02 million units of Open Interest in the July month contract, Maruti Suzuki India witnessed a contraction of 0.02 million units of Open Interest in the July month contract, Tata Consultancy Services witnessed an addition of 0.01 million units of Open Interest in the July month future contract and ICICI Bank witnessed an addition of 2.09 million units of Open Interest in the July month future contract.