Nifty zooms in last hour of trade to close at fresh new high

Indian local benchmark -- Nifty -- extended its record breaking rally for the second consecutive day and closed at fresh new high on Tuesday on hopes of a rate cut in the upcoming monetary policy review of the Reserve Bank of India (RBI). The index rallied in the last hour of trade as investors took some encouragement with global rating agency Moody’s report that India's GDP growth will remain in the range of 6.5-7.5 percent over the next 12-18 months and GST will support the momentum for faster growth. Besides, report that the collection of Integrated Goods and Services Tax from imports crossed Rs 20,000 crore in July - the first month of the roll out of the new indirect tax regime, also aided the sentiments. However, the market traded in a narrow range for most part of the day as PMI survey data indicated that the introduction of the goods & services tax (GST) weighed heavily on the Indian manufacturing industry in July. The Nikkei/IHS Markit Manufacturing Purchasing Managers’ Index fell to 47.9 in July from June's 50.9, its first reading below the 50 mark that separates growth from contraction since December and its lowest reading since February 2009.

Traders were seen piling up positions in Auto, Pharma and Metal stocks, while selling was witnessed in Financial Services and PSU stocks. The top gainers from the F&O segment were Chennai Petroleum Corporation, Voltas and Escorts. On the other hand, the top losers were Godrej Consumer Products, Siemens and Jaiprakash Associates. In the index option segment, maximum OI continues to be seen in the 9900-10500 calls and 9400-10100 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 0.06% and reached 11.90. The 50-share Nifty was up by 37.55 points or 0.37% to settle at 10,114.65.

Nifty August 2017 futures closed at 10138.45 on Tuesday at a premium of 23.80 points over spot closing of 10114.65, while Nifty September 2017 futures ended at 10174.15 at a premium of 59.50 points over spot closing. Nifty August futures saw an addition of 0.19 million (mn) units, taking the total outstanding open interest (OI) to 20.21 million (mn) units. The near month derivatives contract will expire on August 31, 2017.

From the most active contracts, Maruti Suzuki India August 2017 futures traded at a discount of 48.15 points at 7806.85 compared with spot closing of 7855.00. The numbers of contracts traded were 17,284.

Yes Bank August 2017 futures traded at a premium of 8.50 points at 1837.50 compared with spot closing of 1829.00. The numbers of contracts traded were 17,116.

Tech Mahindra August 2017 futures traded at a premium of 2.05 points at 403.70 compared with spot closing of 401.65. The numbers of contracts traded were 16,865.

State Bank of India August 2017 futures traded at a premium of 1.40 points at 310.65 compared with spot closing of 309.25. The numbers of contracts traded were 16,469.

Punjab National Bank August 2017 futures traded at a premium of 1.20 points at 158.50 compared with spot closing of 157.30. The numbers of contracts traded were 12,624.

Among Nifty calls, 10200 SP from the August month expiry was the most active call with a contraction of 0.05 million open interests. Among Nifty puts, 10000 SP from the August month expiry was the most active put with an addition of 0.60 million open interests. The maximum OI outstanding for Calls was at 10500 SP (3.44 mn) and that for Puts was at 10000 SP (4.96 mn). The respective Support and Resistance levels of Nifty are: Resistance 10103.00--- Pivot Point 10140.25--- Support --- 10077.40.

The Nifty Put Call Ratio (PCR) finally stood at 1.12 for August month contract. The top five scrips with highest PCR on OI were Nestle India (3.50), Infibeam Incorporation (1.60), Oil India (1.55), Bajaj Finance (1.38) and Bajaj Finserv (1.35).

Among most active underlying, Maruti Suzuki India witnessed an addition of 0.05 million units of Open Interest in the August month futures contract, followed by State Bank of India witnessing a contraction of 0.37 million units of Open Interest in the August month contract, Yes Bank witnessed a contraction of 0.32 million units of Open Interest in the August month contract, Reliance Industries witnessed an addition of 0.15 million units of Open Interest in the August month future contract and Tata Steel witnessed a contraction of 0.07million units of Open Interest in the August month future contract.