Nifty ends at fresh record high; closes shy of 10,300 mark

The benchmark index Nifty ended the day at fresh record high on Wednesday, aided by government’s announcements of various measures to spur economy, including PSU banks’ Rs 2.11 lakh crore capitalisation plan and Rs 6.92 lakh crore massive road building programme. After opening on a strong note, the index maintained its rally throughout the day, amid report that the government’s revenue collection remained robust with growth of 1.63 percent to Rs 92,150 crore collected as Goods and Services Tax (GST) in September 2017 as against Rs 90,669 crore in August. Traders’ sentiments remained upbeat with Economic Affairs Secretary Subhash Garg’s statement that the reforms initiated by the government like demonetisation and Goods and Services Tax (GST) have been biggest growth contributors. Besides, firmness in the Asian markets also provided some support to the market. Adding to the gains, Finance Minister Arun Jaitley said that the Indian economy is on a strong wicket with sound macro-economic fundamentals. Meanwhile, Chief Economic Adviser Arvind Subramanian said interest burden of recapitalisation bonds on the government would be around Rs 9,000 crore and the move may not have an inflationary impact.

Traders were seen piling up positions in PSU Banking, Media and Metal stocks, while selling was witnessed only in Realty and Pharma stocks.  The top gainers from the F&O segment were Punjab National Bank, Canara Bank and Union Bank of India. On the other hand, the top losers were Cholamandalam Investment and Finance Company, L&T Finance Holdings and Can Fin Homes.  In the index option segment, maximum OI continues to be seen in the 10000-10500 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 increased by 1.47% and reached 11.76. The 50-share Nifty was up by 87.65 points or 0.86% to settle at 10,295.35.

Nifty October 2017 futures closed at 10289.90 on Wednesday at a discount of 5.45 points over spot closing of 10295.35, while Nifty November 2017 futures ended at 10325.35 at a premium of 30 points over spot closing. Nifty October futures saw a contraction of 3.51 million (mn) units, taking the total outstanding open interest (OI) to 17.47 mn units. The near month derivatives contract will expire on October 26, 2017.

From the most active contracts, State Bank of India October 2017 futures traded at a premium of 1.00 point at 323.95 compared with spot closing of 322.95. The numbers of contracts traded were 1,07,692.

ICICI Bank October 2017 futures traded at a discount of 1.25 points at 304.10 compared with spot closing of 305.35. The numbers of contracts traded were 64,864.

Punjab National Bank October 2017 futures traded at a discount of 7.25 points at 198.50 compared with spot closing of 205.75. The numbers of contracts traded were 54,186.

Axis Bank October 2017 futures traded at a discount of 2.00 points at 472.00 compared with spot closing of 474.00. The numbers of contracts traded were 42,498.

Bank of Baroda October 2017 futures traded at a premium of 3.65 points at 187.65 compared with spot closing of 184.00. The numbers of contracts traded were 39,883.

Among Nifty calls, 10300 SP from the October month expiry was the most active call with an addition of 0.34 million open interests. Among Nifty puts, 10200 SP from the October month expiry was the most active put with an addition of 0.12 million open interests.  The maximum OI outstanding for Calls was at 10300 SP (4.30 mn) and that for Puts was at 10000 SP (6.31 mn). The respective Support and Resistance levels of Nifty are: Resistance 10343.63--- Pivot Point 10292.27--- Support --- 10243.98.

The Nifty Put Call Ratio (PCR) finally stood at 1.82 for October month contract. The top five scrips with highest PCR on OI were Ramco Cements (2.42), Oil India (2.16), Bharti Airtel (2.13), Oracle Financial Services Software (1.87) and Ultratech Cement (1.82).

Among most active underlying, State Bank of India witnessed a contraction of 35.46 million units of Open Interest in the October month futures contract, followed by ICICI Bank witnessing a contraction of 27.61 million units of Open Interest in the October month contract, HDFC Bank witnessed a contraction of 5.86 million units of Open Interest in the October month contract, Axis Bank witnessed a contraction of  0.18 million units of Open Interest in the October month contract and Punjab National Bank witnessed a contraction of 5.54 million units of Open Interest in the October month future contract.