Nifty ends in green for second straight day; reclaims 10,200 mark

Indian equity benchmark Nifty ended in green for the second consecutive day, with a gain of 0.22 % on Tuesday amid optimism ahead of quarterly earnings from heavyweights. The index traded with volatility throughout the day, though managed to hold gains amid optimism among the investors with SBI’s report that the government is likely to achieve its fiscal deficit target of 3.2 per cent this financial year as the budgeted disinvestment receipts are on track to realise Rs 72,500 crore. Traders also took some support with the private report stating that the slowdown in the Indian economy has bottomed out but the pace of recovery would critically depend on the initiatives that the government takes from now onwards. Adding to the gains, Union Minister of Minority Affairs Mukhtar Abbas Naqvi said that the Goods and Services Tax (GST) will remain as a Good and Simple Tax in the coming days to come and will prove to be as a better medium for small traders and businessmen. Meanwhile, the government waived penalty on delayed filing of initial GST returns for the months of August and September.

Traders were seen piling up positions in PSU Banking, Media and Metal stocks, while selling was witnessed in IT, Auto and Pharma stocks. The top gainers from the F&O segment were Jet Airways (India), NCC and Andhra Bank. On the other hand, the top losers were Havells India, Reliance Communications and Shree Cements. In the index option segment, maximum OI continues to be seen in the 9900-10500 calls and 9500-10200 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 5.96% and reached 11.59. The 50-share Nifty was up by 22.85 points or 0.22% to settle at 10,207.70.

Nifty October 2017 futures closed at 10219.30 on Tuesday at a premium of 11.60 points over spot closing of 10207.70, while Nifty November 2017 futures ended at 10255.15 at a premium of 47.45 points over spot closing. Nifty October futures saw a contraction of 3.41 million (mn) units, taking the total outstanding open interest (OI) to 20.98 mn units. The near month derivatives contract will expire on October 26, 2017.

From the most active contracts, Infosys October 2017 futures traded at a premium of 1.90 point at 926.25 compared with spot closing of 924.35. The numbers of contracts traded were 30,875 .

HDFC Bank October 2017 futures traded at a discount of 2.25 points at 1864.30 compared with spot closing of 1866.55. The numbers of contracts traded were 30,229.

Zee Entertainment Enterprises October 2017 futures traded at a premium of 1.25 points at 525.60 compared with spot closing of 524.35. The numbers of contracts traded were 28,619.

State Bank of India October 2017 futures traded at a discount of 0.25 points at 254.65 compared with spot closing of 254.90. The numbers of contracts traded were 25,456.

ICICI Bank October 2017 futures traded at a premium of 0.25 points at 266.40 compared with spot closing of 266.15. The numbers of contracts traded were 20,378.

Among Nifty calls, 10200 SP from the October month expiry was the most active call with a contraction of 0.82 million open interests. Among Nifty puts, 10200 SP from the October month expiry was the most active put with an addition of 1.09 million open interests.  The maximum OI outstanding for Calls was at 10300 SP (4.02 mn) and that for Puts was at 10000 SP (7.13 mn). The respective Support and Resistance levels of Nifty are: Resistance 10236.17--- Pivot Point 10209.28--- Support --- 10180.82.

The Nifty Put Call Ratio (PCR) finally stood at 1.67 for October month contract. The top five scrips with highest PCR on OI were Ramco Cements (2.08), Oracle Financial Services Software (1.87), Bharti Airtel (1.76), Mahindra & Mahindra Financial Services (1.55) and Kajaria Ceramics (1.44).

Among most active underlying, HDFC Bank witnessed a contraction of 1.86 million units of Open Interest in the October month futures contract, followed by State Bank of India witnessing a contraction of 17.63 million units of Open Interest in the October month contract, Tata Steel witnessed a contraction of 5.01 million units of Open Interest in the October month contract, Reliance Industries witnessed a contraction of  0.59 million units of Open Interest in the October month contract and Infosys witnessed an addition of 4.15 million units of Open Interest in the October month future contract.