Nifty extends gain for third straight session

Indian equity benchmark Nifty extended gains for the third straight session on Tuesday and ended the day above psychological level of 9850 mark amid firm European and Asian markets. After a gap-up opening, the index continued its momentum throughout the day, supported by optimism witnessed among the investors on the back of Finance Minister Arun Jaitley’s indication that the government would consider reducing the goods and services tax slabs and easing compliance burden for small taxpayers once revenues from GST better those from the previous tax regime. Adding some support, the private report stated that India is likely to be the world’s fastest-growing large economy in the next 10 years, driven by digitisation, favourable demographics, globalisation and reforms. Traders also took some encouragement with the report that manufacturing activity in India showed a modest improvement in September supported by increases in both output and new orders. The Nikkei India Manufacturing Purchasing Managers’ Index, or PMI, remained unchanged at 51.2 in September. The market overlooked Fitch Ratings’ latest report which has trimmed its forecast for India’s economic growth in 2017-18 by half a percentage point to 6.9% from its earlier projection of 7.4%.

All the sectoral indices ended in green on NSE except PSU Banking index. The top gainers from the F&O segment were Jindal Steel & Power, PC Jeweller and Hindustan Zinc. On the other hand, the top losers were Reliance Communications, Hindustan Construction Company and Reliance Capital. 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 0.20% and reached 12.46. The 50-share Nifty was up by 70.90 points or 0.72% to settle at 9,859.50.

Nifty October 2017 futures closed at 9868.45 on Tuesday at a premium of 8.95 points over spot closing of 9859.50, while Nifty November 2017 futures ended at 9901.45 at a premium of 41.95 points over spot closing. Nifty October futures saw an addition of 0.73 million (mn) units, taking the total outstanding open interest (OI) to 21.24 mn units. The near month derivatives contract will expire on October 26, 2017.

From the most active contracts, Reliance Industries October 2017 futures traded at a premium of 0.85 point at 799.85 compared with spot closing of 799.00. The numbers of contracts traded were 14,710.

Tata Motors October 2017 futures traded at a premium of 1.80 points at 417.80 compared with spot closing of 416.00. The numbers of contracts traded were 14,589.

Reliance Capital October 2017 futures traded at a premium of 2.10 points at 563.70 compared with spot closing of 561.60. The numbers of contracts traded were 9,805.

GAIL (India) October 2017 futures traded at a discount of 2.70 points at 433.90 compared with spot closing of 436.60. The numbers of contracts traded were 8,961.

Jindal Steel & Power October 2017 futures traded at a premium of 0.65 points at 144.35 compared with spot closing of 143.70. The numbers of contracts traded were 8,702.

Among Nifty calls, 9900 SP from the October month expiry was the most active call with an addition of 0.01 million open interests. Among Nifty puts, 9,800 SP from the October month expiry was the most active put with an addition of 0.76 million open interests.  The maximum OI outstanding for Calls was at 10000 SP (4.65 mn) and that for Puts was at 9700 SP (3.97 mn). The respective Support and Resistance levels of Nifty are: Resistance 9892.92--- Pivot Point 9861.98--- Support --- 9828.57.

The Nifty Put Call Ratio (PCR) finally stood at 0.91 for October month contract. The top five scrips with highest PCR on OI were Cholamandalam Investment and Finance Company (3.90), Torrent Pharmaceuticals (3.20), Kajaria Ceramics (2.13), BOSCH (2.00) and JSW Energy (1.99).
 
Among most active underlying, Reliance Industries witnessed an addition of 0.55 million units of Open Interest in the October month futures contract, followed by Maruti Suzuki India witnessing an addition of 0.03 million units of Open Interest in the October month contract, Tata Motors witnessed an addition of 0.88 million units of Open Interest in the October month contract, Reliance Capital witnessed an addition of  0.88 million units of Open Interest in the October month contract and Vedanta witnessed an addition of 2.00 million units of Open Interest in the October month future contract.