Nifty ends range-bound session lower, drops 26 points

Indian equity benchmark -- Nifty -- failed to hold initial gains and closed a range-bound session on a negative note on Thursday, as investors turned cautious over valuation concerns amid muted quarterly earnings numbers by some bluechip companies. The market opened higher with taking support from Asian Development Bank's (ADB) latest report which predicted Asia's economy to expand faster in 2017; South Asia to remain the fastest growing of all sub-regions and India to achieve a 7.4 percent growth due to strong consumption. Meanwhile, the government said that tax rates under the Goods and Services Tax (GST) will not be revised unless there is an anomaly, but promised to go slow on enforcement actions in the first six months on genuine mistakes. However, the market participants booked early gains in second half of trade ahead of earnings results from market heavyweight Reliance Industries, due later in the day. Meanwhile, Indian companies raised Rs 1,835 crore in April this year by issuing shares on preferential basis, an over 53 per cent drop compared to the same month a year ago.

Traders were seen piling up positions in Financial Services, Realty and Banking stocks, while selling was witnessed in PSU, Metal and Pharma stocks. The top gainers from the F&O segment were Sintex Industries, Just Dial and Fortis Healthcare. On the other hand, the top losers were Canara Bank, MindTree and Hindustan Petroleum Corporation.  In the index option segment, maximum OI continues to be seen in the 9700-10200 calls and 9300-9900 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 0.53% and reached 11.31. The 50-share Nifty was down by 26.30 points or 0.27% to settle at 9,873.30.

Nifty July 2017 futures closed at 9888.05 on Thursday at a premium of 14.75 points over spot closing of 9873.30, while Nifty August 2017 futures ended at 9924.85 at a premium of 51.55 points over spot closing. Nifty July futures saw a contraction of 0.24 million (mn) units, taking the total outstanding open interest (OI) to 18.20 million (mn) units. The near month derivatives contract will expire on July 27, 2017.

From the most active contracts, Axis Bank July 2017 futures traded at a premium of 0.20 points at 539.35 compared with spot closing of 539.15. The numbers of contracts traded were 36,973.

Kotak Mahindra Bank July 2017 futures traded at a premium of 0.55 points at 979.65 compared with spot closing of 979.10. The numbers of contracts traded were 22,502.

Reliance Industries July 2017 futures traded at a premium of 8.30 points at 1534.40 compared with spot closing of 1526.10. The numbers of contracts traded were 18,233.

DLF July 2017 futures traded at a premium of 0.25 points at 203.65 compared with spot closing of 203.40. The numbers of contracts traded were 14,040.

HDFC Bank July 2017 futures traded at a discount of 0.05 points at 1711.95 compared with spot closing of 1712.00. The numbers of contracts traded were 12,860.

Among Nifty calls, 9900 SP from the July month expiry was the most active call with an addition of 0.90 million open interests. Among Nifty puts, 9800 SP from the July month expiry was the most active put with a contraction of 0.002 million open interests. The maximum OI outstanding for Calls was at 10000 SP (7.09 mn) and that for Puts was at 9800 SP (6.50 mn). The respective Support and Resistance levels of Nifty are: Resistance 9909.42--- Pivot Point 9886.43--- Support --- 9850.32.

The Nifty Put Call Ratio (PCR) finally stood at 1.35 for July month contract. The top five scrips with highest PCR on OI were Indiabulls Real Estate (1.49), Berger Paints India (1.43), Bharti Airtel (1.36), Hindalco Industries (1.22) and Infibeam Incorporation (1.21).

Among most active underlying, Reliance Industries witnessed an addition of 0.41 million units of Open Interest in the July month futures contract, followed by Axis Bank witnessing an addition of 0.03 million units of Open Interest in the July month contract, Kotak Mahindra Bank witnessed a contraction of 0.81 million units of Open Interest in the July month contract, Canara Bank witnessed a contraction of 0.09 million units of Open Interest in the July month future contract and DLF witnessed an addition of 2.21 million units of Open Interest in the July month future contract.