Nifty clocks impressive gains to end near highest point of day

Gaining for the second straight session, the Indian equity benchmark -- Nifty -- closed near highest point of the day on Wednesday with support from major sectoral indices such as realty and bankex. The index remained buoyant throughout the session with taking support from a blog of Asian Development Bank’s website, stating that the goods and services tax in India will benefit the lower and lower-middle income class as it is likely to reduce the tax rate on goods. Traders also took some encouragement with the Financial Stability & Development Council’s (FSDC) report that India has macro-economic stability today on the back of improvement in its macro-economic fundamentals and structural reforms with the launch of the Goods and Services Tax (GST). Besides, the report stating that the loan portfolio of micro-finance institutions (MFIs) increased by 26 percent to Rs 35,045 crore in the first quarter ended June 2017, too added to the rally. Investors paid no heed towards the rating agency ICRA’s latest report which has estimated that India’s gross value added (GVA) growth is likely to slow down to 6.3% in April-June quarter (Q1) of fiscal year 2017-18 from 7.6% in the same period of pervious year.
 
Traders were seen piling up positions in Realty, PSU and Metal stocks, while selling was witnessed only in FMCG stocks. The top gainers from the F&O segment were Indo Count Industries, Fortis Healthcare and Balkrishna Industries. On the other hand, the top losers were Cummins India, Tech Mahindra and PC Jeweller. In the index option segment, maximum OI continues to be seen in the 9800-10500 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 6.54% and reached 13.18. The 50-share Nifty was up by 86.95 points or 0.89% to settle at 9,852.50.

Nifty August 2017 futures closed at 9862.30 on Wednesday at a premium of 9.80 points over spot closing of 9852.50, while Nifty September 2017 futures ended at 9895.55 at a premium of 43.05 points over spot closing. Nifty August futures saw a contraction of 0.82 million (mn) units, taking the total outstanding open interest (OI) to 24.28 mn units. The near month derivatives contract will expire on August 31, 2017.

From the most active contracts, Infosys August 2017 futures traded at a premium of 3.05 points at 896.45 compared with spot closing of 893.40. The numbers of contracts traded were 70,446.

Reliance Industries August 2017 futures traded at a premium of 1.70 points at 1584.25 compared with spot closing of 1582.55. The numbers of contracts traded were 12,889.

Yes Bank August 2017 futures traded at a premium of 2.10 points at 1727.55 compared with spot closing of 1725.45. The numbers of contracts traded were 12,712.

Tata Steel August 2017 futures traded at a discount of 0.75 points at 634.50 compared with spot closing of 635.25. The numbers of contracts traded were 12,335.

State Bank of India August 2017 futures traded at a premium of 0.90 points at 279.60 compared with spot closing of 278.70. The numbers of contracts traded were 12,334.

Among Nifty calls, 9900 SP from the August month expiry was the most active call with a contraction of 0.09 million open interests. Among Nifty puts, 9800 SP from the August month expiry was the most active put with an addition of 0.59 million open interests. The maximum OI outstanding for Calls was at 10000 SP (5.50 mn) and that for Puts was at 9800 SP (5.70 mn). The respective Support and Resistance levels of Nifty are: Resistance 9878.02--- Pivot Point 9832.38--- Support --- 9806.87.

The Nifty Put Call Ratio (PCR) finally stood at 0.97 for August month contract. The top five scrips with highest PCR on OI were Infibeam Incorporation (1.49), Nestle India (1.33), Bharti Airtel (1.30), Indusind Bank (1.19) and Indiabulls Real Estate (1.17).

Among most active underlying, Infosys witnessed an addition of 0.53 million units of Open Interest in the August month futures contract, followed by State Bank of India witnessing a contraction of 3.53 million units of Open Interest in the August month contract, Tata Steel  witnessed an addition of 0.66 million units of Open Interest in the August month contract, Reliance Industries witnessed a contraction of 0.03 million units of Open Interest in the August month contract and Vedanta witnessed an addition of 0.83 million units of Open Interest in the August month future contract.