Nifty erases losses to settle near day’s high

Indian local benchmark -- Nifty -- erased all its losses on Friday to settle the session near day’s high above 10050 level.  The index traded in the negative zone for most part of the session, as investors were disappointed with just 25 bps rate cut by Reserve Bank of India (RBI). Sentiments also remained downbeat with Finance Minister Arun Jaitley’s statement that lending rate of 14-15 percent will make India uncompetitive in the global market and industry cannot invest at such higher interest rates. However, firm trend in Europe, supported the Nifty to end on a positive note. Some support also came with the private report expecting a pick-up in the note ban affected rural demand from October this year. The report further said that the second consecutive bumper crop on good monsoons, farm loan waivers, and lower agriculture input costs will help revive the rural demand. Besides, foreign direct investment (FDI) in textile sector more than doubled to $618.95 million during 2016-17 from $230.13 million in the previous fiscal, also contributed to the gains.

All the sectoral indices ended in green on the NSE except Pharma. The top gainers from the F&O segment were Hindustan Petroleum Corporation, Titan Company and Indian Oil Corporation. On the other hand, the top losers were Housing Development & Infrastructure, CEAT and Biocon. 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 decreased by 2.17% and reached 11.39. The 50-share Nifty was up by 52.75 points or 0.53% to settle at 10,066.40.

Nifty August 2017 futures closed at 10108.55 on Friday at a premium of 42.15 points over spot closing of 10066.40, while Nifty September 2017 futures ended at 10142.25 at a premium of 75.85 points over spot closing. Nifty August futures saw a contraction of 0.29 million (mn) units, taking the total outstanding open interest (OI) to 21.46 million (mn) units. The near month derivatives contract will expire on August 31, 2017.

From the most active contracts, Hindustan Petroleum Corporation August 2017 futures traded at a discount of 2.25 points at 434.25 compared with spot closing of 436.50. The numbers of contracts traded were 23,326.

Titan Company August 2017 futures traded at a premium of 2.50 points at 613.25 compared with spot closing of 610.75. The numbers of contracts traded were 19,034.

Reliance Industries August 2017 futures traded at a premium of 7.40 points at 1633.90 compared with spot closing of 1626.50. The numbers of contracts traded were 18,404.

Indian Oil Corporation August 2017 futures traded at a premium of 0.25 points at 418.25 compared with spot closing of 418.00. The numbers of contracts traded were 16,989.

Yes Bank August 2017 futures traded at a premium of 3.80 points at 1819.05 compared with spot closing of 1815.25. The numbers of contracts traded were 16,621.

Among Nifty calls, 10100 SP from the August month expiry was the most active call with a contraction of 0.52 million open interests. Among Nifty puts, 10000 SP from the August month expiry was the most active put with an addition of 0.57 million open interests. The maximum OI outstanding for Calls was at 10500 SP (3.82 mn) and that for Puts was at 10000 SP (5.20 mn). The respective Support and Resistance levels of Nifty are: Resistance 10098.32--- Pivot Point 10043.33--- Support --- 10011.42.

The Nifty Put Call Ratio (PCR) finally stood at 1.04 for August month contract. The top five scrips with highest PCR on OI were Nestle India (2.67), Oil India (2.50), Kajaria Ceramics (2.33), Infibeam Incorporation (1.61) and Bajaj Finance (1.28).

Among most active underlying, Reliance Industries witnessed an addition of 0.27 million units of Open Interest in the August month futures contract, followed by Titan Company witnessing an addition of 1.22 million units of Open Interest in the August month contract, CEAT witnessed an addition of 0.009 million units of Open Interest in the August month contract, Hindustan Petroleum Corporation witnessed an addition of 0.65 million units of Open Interest in the August month future contract and State Bank of India witnessed a contraction of 0.37 million units of Open Interest in the August month future contract.