Nifty closes marginally lower but holds 10K mark

Indian equity benchmark -- Nifty -- pared most of its losses in last leg of trade and closed marginally lower on Friday amid disappointing quarterly earnings. The index hovered in red terrain throughout the session, as some anxiety spread among the investors with Niti Aayog chief Amitabh Kant’s statement that the government needs to adopt the model of build, operate and transfer (BOT) for infrastructure projects. These projects then should be given to private companies as the government is incapable of handling the maintenance and operations of such projects. Besides, traders shifted their focus towards Reserve Bank of India’s two-day monetary policy meeting, which is set to begin next week on Tuesday, while the outcome is expected on Wednesday. Negative cues from Asian markets after US tech shares pulled Wall Street slightly lower also contributed to the losses. However, emergence of buying in the last hour of trade helped the index to trim most of its initial losses and finally settled above the psychologically important level of 10,000. Some support also came with S&P Ratings’ latest report that large Indian corporates’ revenues are expected to witness growth of around 10% annually over next 2 fiscal years.

Traders were seen piling up positions in IT, PSU and FMCG stocks, while selling was witnessed in Metal, Realty and Pharma stocks.  The top gainers from the F&O segment were Reliance Capital, JSW Energy and L&T Finance Holdings. On the other hand, the top losers were the India Cements, Dr. Reddy's Laboratories and Infibeam Incorporation.  In the index option segment, maximum OI continues to be seen in the 9900-10500 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 decreased by 0.71% and reached 11.13. The 50-share Nifty was down by 6.05 points or 0.06% to settle at 10,014.50.

Nifty August 2017 futures closed at 10042.25 on Friday at a premium of 27.75 points over spot closing of 10014.50, while Nifty September 2017 futures ended at 10075.90 at a premium of 61.40 points over spot closing. Nifty August futures saw an addition of 2.94 million (mn) units, taking the total outstanding open interest (OI) to 19.40 million (mn) units. The near month derivatives contract will expire on August 31, 2017.

From the most active contracts, Yes Bank August 2017 futures traded at a premium of 7.45 points at 1852.40 compared with spot closing of 1844.95. The numbers of contracts traded were 46,806.

Reliance Capital August 2017 futures traded at a premium of 3.50 points at 722.50 compared with spot closing of 719.00. The numbers of contracts traded were 34,544.

ICICI Bank August 2017 futures traded at a premium of 2.25 points at 298.30 compared with spot closing of 296.05. The numbers of contracts traded were 21,732.

LIC Housing Finance August 2017 futures traded at a premium of 5.90 points at 720.15 compared with spot closing of 714.25. The numbers of contracts traded were 21,715.

Housing Development Finance Corporation August 2017 futures traded at a premium of 16.30 points at 1792.30 compared with spot closing of 1776.00. The numbers of contracts traded were 21,423.

Among Nifty calls, 10100 SP from the August month expiry was the most active call with an addition of 0.39 million open interests. Among Nifty puts, 9900 SP from the August month expiry was the most active put with an addition of 0.48 million open interests. The maximum OI outstanding for Calls was at 10500 SP (3.17 mn) and that for Puts was at 9800 SP (4.20 mn). The respective Support and Resistance levels of Nifty are: Resistance 10045.53--- Pivot Point 9995.02--- Support --- 9963.98.

The Nifty Put Call Ratio (PCR) finally stood at 0.99 for August month contract. The top five scrips with highest PCR on OI were Colgate-Palmolive (India) (1.86), Bajaj Finserv (1.52), Kajaria Ceramics (1.33), Punjab National Bank (1.32) and Bajaj Finance (1.30).

Among most active underlying, Yes Bank witnessed an addition of 0.22 million units of Open Interest in the August month futures contract, followed by Reliance Capital witnessing an addition of 1.93 million units of Open Interest in the August month contract, ICICI Bank witnessed an addition of 5.07 million units of Open Interest in the August month contract, Housing Development Finance Corporation  witnessed an addition of 1.55 million units of Open Interest in the August month future contract and Reliance Industries witnessed an addition of 0.68 million units of Open Interest in the August month future contract.