Nifty ends at record closing high ahead of Diwali

Key Indian benchmark Nifty extended gains to settle last trading day of the week at record closing high, aided by good macro economic data along with firm Asian cues. Sentiments were also buttressed with India’s industrial production growth data strengthening in August 2017 to record robust 4.3% growth, while retail inflation for September 2017 easing to 3.28%, as compared to 4.39% in the same month previous year and 3.36% in August 2017. After opening on a firm note, the market maintained its gaining momentum throughout the day, with taking support from the World Bank chief’s statement that the reforms undertaken by Prime Minister Narendra Modi have been significant and the results would be reflected in the mid and long-term growth figures. Adding to the gains, Finance Minister Arun Jaitley said that a ‘different India’ is ready to benefit from a strong global economic recovery after a series of reforms including demonetisation, goods and services tax, easing of regulations and procedures. Traders also took some encouragement with Minister of State for Electronics and IT - K.J. Alphons’ statement that the Digital India programme has the potential to provide an incremental 20-30 per cent increase in India’s GDP by 2025. Meanwhile, foreign direct investment (FDI) in China rose the most in more than two years in September, likely boosted by strong growth in the country's manufacturing and hi-tech sectors.

Traders were seen piling up positions in Banking, Realty and Metal stocks, while selling was witnessed in Pharma, Media and FMCG stocks.  The top gainers from the F&O segment were Bharti Airtel, The Karnataka Bank and Can Fin Homes. On the other hand, the top losers were Indiabulls Real Estate, GAIL (India) and Reliance Capital. 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 increased by 1.99% and reached 11.26. The 50-share Nifty was up by 71.05 points or 0.70% to settle at 10,167.45.

Nifty October 2017 futures closed at 10192.40 on Friday at a premium of 24.95 points over spot closing of 10167.45, while Nifty November 2017 futures ended at 10224.35 at a premium of 56.90 points over spot closing. Nifty October futures saw an addition of 0.30 million (mn) units, taking the total outstanding open interest (OI) to 26.66 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 1.40 point at 878.75 compared with spot closing of 877.35. The numbers of contracts traded were 25,655.

Tata Steel October 2017 futures traded at a premium of 0.90 points at 711.40 compared with spot closing of 710.50. The numbers of contracts traded were 21,752.

Bharti Airtel October 2017 futures traded at a premium of 1.20 points at 432.20 compared with spot closing of 431.00. The numbers of contracts traded were 20,591.

Tata Consultancy Services October 2017 futures traded at a discount of 0.15 points at 2559.60 compared with spot closing of 2559.75. The numbers of contracts traded were 20,459.

The Karnataka Bank October 2017 futures traded at a premium of 1.05 points at 164.25 compared with spot closing of 163.20. The numbers of contracts traded were 18,386.

Among Nifty calls, 10200 SP from the October month expiry was the most active call with an addition of 0.35 million open interests. Among Nifty puts, 10100 SP from the October month expiry was the most active put with an addition of 2.42 million open interests.  The maximum OI outstanding for Calls was at 10200 SP (3.44 mn) and that for Puts was at 10000 SP (7.07 mn). The respective Support and Resistance levels of Nifty are: Resistance 10199.53--- Pivot Point 10159.82--- Support --- 10127.73.

The Nifty Put Call Ratio (PCR) finally stood at 1.38 for October month contract. The top five scrips with highest PCR on OI were Cholamandalam Investment and Finance Company (6.04), Torrent Pharmaceuticals (4.36), Oracle Financial Services Software (1.87), Ramco Cements (2.21) and Berger Paints India (1.80).  Among most active underlying, Reliance Industries witnessed a contraction of 0.91 million units of Open Interest in the October month futures contract, followed by Tata Steel witnessing a contraction of 1.94 million units of Open Interest in the October month contract, Tata Consultancy Services witnessed a contraction of 0.70 million units of Open Interest in the October month contract, Bharti Airtel witnessed an addition of  2.91 million units of Open Interest in the October month contract and State Bank of India witnessed a contraction of 0.71 million units of Open Interest in the October month future contract.