Nifty settles at fresh record high on F&O expiry day

The local benchmark Nifty ended the volatile session at fresh record high on Thursday, surpassing its 10,300 level. The index started the day on a lackluster note amid volatility on October F&O expiry day. Traders were cautious with the report that India’s economy will likely grow at its slowest pace in four years this financial year, as a currency ban and the new goods and services tax (GST) have disrupted business activity and dampened consumer demand. Some concerns also came with Chief Economic Adviser Arvind Subramanian’s statement that bad loans and stressed assets in Indian Banks are estimated at Rs 10 lakh crore ($153.49 billion). However, the market turned positive in late morning session to end with gains of around 0.50 per cent. Sentiments took support from DIPP Secretary Ramesh Abhishek’s statement that India's ranking may improve significantly in the World Bank's ease of doing business report on the back of reforms initiated by the government. He also said that the introduction of GST is bound to be a ‘gamechanger’ for India's economy despite the expected initial hiccups, which are being addressed by the government. Some solace also came with private report stating that the recapitalisation programme for public sector banks is likely to boost equity market sentiments as it fuels growth recovery hopes, but should be followed up with structural changes at such banks for better results.

Traders were seen piling up positions in Pharma, Media and Metal stocks, while selling was witnessed in PSU Banking and IT stocks.  The top gainers from the F&O segment were Steel Authority of India, IFCI and Adani Power. On the other hand, the top losers were Jaiprakash Associates, Tata Communications and HCL Technologies. In the index option segment, maximum OI continues to be seen in the 10100-10700 calls and 9500-10300 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 1.21% and reached 11.61. The 50-share Nifty was up by 48.45 points or 0.47% to settle at 10,343.80.

Nifty November 2017 futures closed at 10360.55 on Thursday at a premium of 16.75 points over spot closing of 10343.80, while Nifty December 2017 futures ended at 10392.75 at a premium of 48.95 points over spot closing. Nifty November futures saw an addition of 9.21 million (mn) units, taking the total outstanding open interest (OI) to 22.35 mn units. The near month derivatives contract will expire on November 30, 2017.

From the most active contracts, State Bank of India November 2017 futures traded at a premium of 2.70 point at 321.00 compared with spot closing of 318.30. The numbers of contracts traded were 37,285.

HDFC Bank November 2017 futures traded at a premium of 7.65 points at 1799.35 compared with spot closing of 1791.70. The numbers of contracts traded were 35,218.

Infosys November 2017 futures traded at a discount of 20.70 points at 927.85 compared with spot closing of 948.55. The numbers of contracts traded were 32,388.

Yes Bank November 2017 futures traded at a premium of 1.05 points at 333.55 compared with spot closing of 332.50. The numbers of contracts traded were 27,393.

Punjab National Bank November 2017 futures traded at a discount of 10.35 points at 207.65 compared with spot closing of 218.00. The numbers of contracts traded were 26,556.

Among Nifty calls, 10300 SP from the November month expiry was the most active call with an addition of 0.58 million open interests. Among Nifty puts, 10300 SP from the November month expiry was the most active put with an addition of 0.55 million open interests.  The maximum OI outstanding for Calls was at 10500 SP (2.71 mn) and that for Puts was at 10000 SP (4.40 mn). The respective Support and Resistance levels of Nifty are: Resistance 10375.68 --- Pivot Point 10323.77 --- Support --- 10291.88.

The Nifty Put Call Ratio (PCR) finally stood at 1.13 for November month contract. The top five scrips with highest PCR on OI were Repco Home Finance (17.75), Nestle India (2.00), Cadila Healthcare (1.81), Colgate-Palmolive (India) (1.80) and Apollo Hospitals Enterprise (1.60).

Among most active underlying, State Bank of India witnessed an addition of 8.87 million units of Open Interest in the November month futures contract, followed by Reliance Industries witnessing  an addition of 12.70 million units of Open Interest in the November month contract, HDFC Bank witnessed an addition of 6.45 million units of Open Interest in the November month contract, Punjab National Bank witnessed an addition of  5.76 million units of Open Interest in the November month contract and Maruti Suzuki India witnessed  an addition of 0.72 million units of Open Interest in the November month future contract.