Nifty ends higher after RBI's status quo move

aThe local benchmark Nifty ended the session higher by 55.40 points on Wednesday as the Reserve Bank’s decision to keep repo rate unchanged at 6.0 per cent was in line with investors’ expectations. After a cautious opening, the market mood remained firm during the day as the growth of eight core infrastructure industries surged to five-month high by 4.9% in August 2017, as compared to 2.4% in July 2017, on the back of a double-digit jump in coal production and subsequent rise in electricity generation.  Sentiments also got some support with the private report stating that a majority 77 per cent of the mid-market enterprises (MMEs) in the country are confident about the domestic economy and expect higher revenue growth compared to their global peers. Traders took some encouragement with finance secretary Ashok Lavasa’s statement that the economy is going through a phase of readjustment to a system of formalisation that entails greater tax compliance and transparency in financial transactions. He added that things are beginning to settle down and the country is on the recovery path.

All the sectoral indices ended in green on NSE except IT and Metal. The top gainers from the F&O segment were Jaiprakash Associates, BEML and Bata India. On the other hand, the top losers were Dish TV India, Apollo Tyres and Idea Cellular. 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 5.30% and reached 11.80. The 50-share Nifty was up by 55.40 points or 0.56% to settle at 9,914.90.

Nifty October 2017 futures closed at 9930.45 on Wednesday at a premium of 15.55 points over spot closing of 9914.90, while Nifty November 2017 futures ended at 9955.20 at a premium of 40.30 points over spot closing. Nifty October futures saw an addition of 1.18 million (mn) units, taking the total outstanding open interest (OI) to 22.42 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 discount of 2.50 point at 821.50 compared with spot closing of 824.00. The numbers of contracts traded were 16,993.

Sun Pharmaceutical Industries October 2017 futures traded at a premium of 2.25 points at 520.25 compared with spot closing of 518.00. The numbers of contracts traded were 13,405.

Tata Motors October 2017 futures traded at a discount of 0.90 points at 424.90 compared with spot closing of 425.80. The numbers of contracts traded were 12,435.

Reliance Capital October 2017 futures traded at a premium of 0.80 points at 577.10 compared with spot closing of 576.30. The numbers of contracts traded were 10,858.

Hindustan Petroleum Corporation October 2017 futures traded at a discount of 0.60 points at 444.25 compared with spot closing of 444.85. The numbers of contracts traded were 9,043.

Among Nifty calls, 10000 SP from the October month expiry was the most active call with a contraction of 0.34 million open interests. Among Nifty puts, 9,800 SP from the October month expiry was the most active put with an addition of 0.94 million open interests.  The maximum OI outstanding for Calls was at 10000 SP (4.30 mn) and that for Puts was at 9800 SP (4.49 mn). The respective Support and Resistance levels of Nifty are: Resistance 9951.92--- Pivot Point 9901.28--- Support --- 9864.27.

The Nifty Put Call Ratio (PCR) finally stood at 1.00 for October month contract. The top five scrips with highest PCR on OI were Cholamandalam Investment and Finance Company (7.33), Torrent Pharmaceuticals (5.00), Kajaria Ceramics (2.20), JSW Energy (2.03) and BOSCH (2.00).
 
Among most active underlying, Reliance Industries witnessed an addition of 1.09 million units of Open Interest in the October month futures contract, followed by Tata Motors witnessing an addition of 0.22 million units of Open Interest in the October month contract, Maruti Suzuki India witnessed an addition of 0.05 million units of Open Interest in the October month contract, State Bank of India witnessed a contraction of  0.02 million units of Open Interest in the October month contract and Reliance Capital  witnessed an addition of 0.60 million units of Open Interest in the October month future contract.