Nifty ends nearly 1% higher amid easing geopolitical tensions

The local benchmark -- Nifty -- rose nearly 1 per cent to close the day higher on Wednesday ahead of derivatives expiry of August series due tomorrow. The index traded on a strong note throughout the session with taking support from Finance Minister Arun Jaitley’s statement that Goods and Services Tax (GST) collections have exceeded estimates in the first month of the landmark levy’s rollout, despite a significant number of assessees not having filed returns yet. Jaitley added that the total collection under GST for July is pegged at Rs 92,283 crore. Sentiments also got some support by a recovery in broader Asia as concerns stemming from North Korea’s firing of a missile over Japan receded. Besides, NITI Aayog’s statement that enhancing access to low-cost capital to businesses could serve as an important vehicle for improving the business environment, especially in poor states like Bihar, too contributed to the rally. However, in the last hour of trade, market pared some of its gains as concerns spread among the traders with ICRA’s latest report stating that the profitability of India Inc got hurt with the margins contracting by as much as 1.80% to 15.7% on a year-on-year basis on account of introduction of new tax regime.

Traders were seen piling up positions in Metal, Realty and FMCG stocks, while selling was witnessed only in IT stocks. The top gainers from the F&O segment were Jaiprakash Associates, Ujjivan Financial Services and Adani Enterprises. On the other hand, the top losers were MindTree, Tech Mahindra and Oracle Financial Services Software. In the index option segment, maximum OI continues to be seen in the 9800-10500 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 4.84% and reached 12.88. The 50-share Nifty was up by 88.35 points or 0.90% to settle at 9,884.40.

Nifty August 2017 futures closed at 9883.60 on Wednesday at a discount of 0.80 points over spot closing of 9884.40, while Nifty September 2017 futures ended at 9912.45 at a premium of 28.05 points over spot closing. Nifty August futures saw a contraction of 2.99 million (mn) units, taking the total outstanding open interest (OI) to 16.89 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 discount of 0.60 points at 926.10 compared with spot closing of 926.70. The numbers of contracts traded were 24,343.

Yes Bank August 2017 futures traded at a premium of 0.75 points at 1750.75 compared with spot closing of 1750.00. The numbers of contracts traded were 18,529.

Reliance Industries August 2017 futures traded at a premium of 0.55 points at 1564.05 compared with spot closing of 1563.50. The numbers of contracts traded were 18,161.

Tata Motors August 2017 futures traded flat with spot closing of 379.00. The numbers of contracts traded were 16,052.

Ujjivan Financial Services August 2017 futures traded at a discount of 2.90 points at 358.65 compared with spot closing of 361.55. The numbers of contracts traded were 16,013.

Among Nifty calls, 9900 SP from the August month expiry was the most active call with a contraction of 1.91 million open interests. Among Nifty puts, 9800 SP from the August month expiry was the most active put with an addition of 0.29 million open interests. The maximum OI outstanding for Calls was at 10000 SP (5.77 mn) and that for Puts was at 9800 SP (5.83 mn). The respective Support and Resistance levels of Nifty are: Resistance 9912.30--- Pivot Point 9881.55--- Support --- 9853.65.

The Nifty Put Call Ratio (PCR) finally stood at 1.01 for August month contract. The top five scrips with highest PCR on OI were Nestle India (2.00), Infibeam Incorporation (1.57), Bharti Airtel (1.42), DHFL (1.36) and JSW Steel (1.36).

Among most active underlying, Reliance Industries witnessed a contraction of 3.26 million units of Open Interest in the August month futures contract, followed by Tata Steel witnessing a contraction of 6.92 million units of Open Interest in the August month contract, Maruti Suzuki India witnessed a contraction of 0.34 million units of Open Interest in the August month contract, State Bank of India witnessed a contraction of 13.35 million units of Open Interest in the August month contract and Infosys witnessed a contraction of 5.19 million units of Open Interest in the August month future contract.