Nifty logs fresh closing high on hopes of RBI rate cut

Indian equity benchmark -- Nifty -- started the week on a positive note to log fresh closing high on hopes of rate cut by the Monetary Policy Committee of Reserve Bank of India (RBI) on the back of low levels of inflation. Traders also remained optimistic with Finance Minister Arun Jaitley’s statement, who underlining the government’s push on reforms has said that in the last three years, the prime minister has been forcing one or two important changes. India has to become a country where it is easy to do business and the businesses are done in the most ethical way. Besides, Moody’s report stating that India’s GDP growth will remain in the range of 6.5-7.5% over the next 12-18 months and GST will support the momentum for faster growth, too aided the sentiments. Some support also came with trade body EEPC India’s latest report that India's exports of engineering goods to China saw a whopping 123 per cent growth at USD 629 million during April-June this fiscal, driven by an upsurge in shipments of non-ferrous metals.

Traders were seen piling up positions in Financial Services, PSU and Metal stocks, while selling was witnessed in Media, FMCG and Pharma stocks. The top gainers from the F&O segment were Infibeam Incorporation, Shree Cements and Balrampur Chini Mills. On the other hand, the top losers were V-Guard Industries, Indo Count Industries and LIC Housing Finance. 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 increased by 6.85% and reached 11.90. The 50-share Nifty was up by 62.60 points or 0.63% to settle at 10,077.10.

Nifty August 2017 futures closed at 10103.00 on Monday at a premium of 25.90 points over spot closing of 10077.10, while Nifty September 2017 futures ended at 10134.60 at a premium of 57.50 points over spot closing. Nifty August futures saw an addition of 0.62 million (mn) units, taking the total outstanding open interest (OI) to 20.02 million (mn) units. The near month derivatives contract will expire on August 31, 2017.

From the most active contracts, State Bank of India August 2017 futures traded at a premium of 0.75 points at 313.55 compared with spot closing of 312.80. The numbers of contracts traded were 34,531.

Infosys August 2017 futures traded at a premium of 0.10 points at 1015.10 compared with spot closing of 1015.00. The numbers of contracts traded were 20,974.

Yes Bank August 2017 futures traded at a premium of 10.85 points at 1822.75 compared with spot closing of 1811.90. The numbers of contracts traded were 20,910.

Larsen & Toubro August 2017 futures traded at a discount of 7.10 points at 1186.10 compared with spot closing of 1193.20. The numbers of contracts traded were 16,478.

ICICI Bank August 2017 futures traded at a premium of 1.15 points at 303.95 compared with spot closing of 302.80. The numbers of contracts traded were 14,964.

Among Nifty calls, 10100 SP from the August month expiry was the most active call with a contraction of 0.11 million open interests. Among Nifty puts, 10000 SP from the August month expiry was the most active put with an addition of 0.70 million open interests. The maximum OI outstanding for Calls was at 10500 SP (3.31 mn) and that for Puts was at 10000 SP (4.35 mn). The respective Support and Resistance levels of Nifty are: Resistance 10103.02--- Pivot Point 10059.98--- Support --- 10034.07.

The Nifty Put Call Ratio (PCR) finally stood at 1.08 for August month contract. The top five scrips with highest PCR on OI were Infibeam Incorporation (1.50), Colgate-Palmolive (India) (1.39), Bajaj Finserv (1.38), Bajaj Finance (1.28) and Tata Motors – DVR (1.20).

Among most active underlying, State Bank of India witnessed an addition of 3.99 million units of Open Interest in the August month futures contract, followed by Larsen & Toubro witnessing a contraction of 0.54 million units of Open Interest in the August month contract, Yes Bank witnessed an addition of 0.27 million units of Open Interest in the August month contract, Reliance Industries witnessed an addition of 0.34 million units of Open Interest in the August month future contract and Infosys witnessed a contraction of 0.47 million units of Open Interest in the August month future contract.