Nifty ends above 10K mark for first time ever ahead of F&O expiry

Indian equity benchmark -- Nifty -- extended gains in the last hour of trade and ended above its crucial resistance level of 10,000 for the first time on Wednesday ahead of the July derivatives contract expiry tomorrow. Investors remained optimistic throughout the day with report that the government approved an addition of 7.47 lakh new registration applications under the Goods and Services Tax (GST) regime. Some support also came with the National Securities Depository’s (NSDL) report stating that foreign portfolio investors (FPIs) have pumped in over $25.4 billion into the Indian equity and debt market segments thus far in calendar year 2017 (CY17). Besides, a buying in late-session on the back of positive global cues helped the index to end at fresh record closing high. The report stating that a team of officers, led by the commerce secretary, is holding detailed consultations with states to clear the bottlenecks that are hampering exports, too aided the sentiments. However, traders awaited the outcome from the Federal Reserve meet later in the day.

Traders were seen piling up positions in Metal, Pharma and Auto stocks, while selling was witnessed in Media, IT and PSU stocks.  The top gainers from the F&O segment were Jaiprakash Associates, Jindal Steel & Power and Yes Bank. On the other hand, the top losers were the Federal Bank, Just Dial and SREI Infrastructure.  In the index option segment, maximum OI continues to be seen in the 9800-10200 calls and 9400-10000 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 2.36% and reached 11.17. The 50-share Nifty was up by 56.10 points or 0.56% to settle at 10,020.65.

Nifty July 2017 futures closed at 10023.05 on Wednesday at a premium of 2.40 points over spot closing of 10020.65, while Nifty August 2017 futures ended at 10065.00 at a premium of 44.35 points over spot closing. Nifty July futures saw a contraction of 2.20 million (mn) units, taking the total outstanding open interest (OI) to 12.34 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 discount of 7.85 points at 1714.15 compared with spot closing of 1722.00. The numbers of contracts traded were 68,242.

Axis Bank July 2017 futures traded at a premium of 2.60 points at 529.45 compared with spot closing of 526.85. The numbers of contracts traded were 26,991.

Bharat Financial Inclusion July 2017 futures traded at a premium of 1.10 points at 790.60 compared with spot closing of 789.50. The numbers of contracts traded were 25,260.

Reliance Industries July 2017 futures traded at a premium of 2.45 points at 1623.60 compared with spot closing of 1621.15. The numbers of contracts traded were 24,822.

ICICI Bank July 2017 futures traded flat at spot closing of 309.95. The numbers of contracts traded were 23,297.

Among Nifty calls, 10000 SP from the July month expiry was the most active call with a contraction of 2.01 million open interests. Among Nifty puts, 9900 SP from the July month expiry was the most active put with a contraction of 0.89 million open interests. The maximum OI outstanding for Calls was at 10000 SP (5.37 mn) and that for Puts was at 9900 SP (5.47 mn). The respective Support and Resistance levels of Nifty are: Resistance 10042.42--- Pivot Point 10004.18--- Support --- 9982.42.

The Nifty Put Call Ratio (PCR) finally stood at 2.01 for July month contract. The top five scrips with highest PCR on OI were Bajaj Finance (1.76), Bharti Airtel (1.63), Wipro (1.43), Hindalco Industries (1.39) and Tata Consultancy Services (1.30).

Among most active underlying, Yes Bank witnessed a contraction of 0.99 million units of Open Interest in the July month futures contract, followed by Reliance Industries witnessing a contraction of 2.49 million units of Open Interest in the July month contract, Axis Bank witnessed a contraction of 5.94 million units of Open Interest in the July month contract, the Federal Bank witnessed a contraction of 27.11 million units of Open Interest in the July month future contract and Vedanta witnessed a contraction of 13.46 million units of Open Interest in the July month future contract.