Nifty manages to end above neutral line

The local benchmark Nifty managed to end in green territory on Monday, amid positive European cues. The index remained in negative territory for most part of the day as global rating agency Standard and Poor's (S&P) kept its India rating unchanged at the lowest investment grade of ‘BBB-’, with a stable outlook. Investors also remained pessimistic with industry body ASSOCHAM’s latest report stating that inflation would remain a key concern for the RBI and the government, dimming hopes of a cut in interest rates. However, in the second half, the market pared all their losses to end above neutral line, supported by Niti Aayog Vice Chairman Rajiv Kumar’s statement that the time has come for consolidation of reforms, including GST, bankruptcy code and benami law, initiated by the Modi government in the last 42 months to ensure that the steps deliver the 'desired fruits'. Some comfort also came with the Department of Economic Affairs Secretary Subhash Chandra Garg’s statement that the economy will grow at a faster pace in quarter-ended September, as compared with the first quarter of the financial year 2017-18 (Apr-Mar). Besides, Chief Economic Adviser Arvind Subramanian’s statement that India’s steady growth has resulted in a consistent decline in poverty and improvement in several human development indices, too aided the sentiments.

All the sectoral indices ended in green on the NSE except Metal and FMCG.  The top gainers from the F&O segment were TV18 Broadcast, MindTree and Suzlon Energy. On the other hand, the top losers were NIIT Technologies, JSW Steel and Godrej Consumer Products. In the index option segment, maximum OI continues to be seen in the 10300-10800 calls and 9900-10400 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 3.57% and reached 13.03. The 50-share Nifty was up by 9.85 points or 0.09% to settle at 10,399.55.

Nifty November 2017 futures closed at 10418.50 on Monday, at a premium of 18.95 points over spot closing of 10399.55, while Nifty December 2017 futures ended at 10457.20, at a premium of 57.65 points over spot closing. Nifty November futures saw a contraction of 2.26 million (mn) units, taking the total outstanding open interest (OI) to 17.63 mn units. The near month derivatives contract will expire on November 30, 2017.

From the most active contracts, Axis Bank November 2017 futures traded at a premium of 1.20 point at 560.90 compared with spot closing of 559.70. The numbers of contracts traded were 26,295.

Infosys November 2017 futures traded at a premium of 1.00 points at 997.55 compared with spot closing of 996.55. The numbers of contracts traded were 19,252.

PC Jeweller November 2017 futures traded at a discount of 0.25 points at 405.80 compared with spot closing of 406.05. The numbers of contracts traded were 17,298.

State Bank of India November 2017 futures traded at a discount of 0.85 points at 335.95 compared with spot closing of 336.80. The numbers of contracts traded were 15,694.

Sun Pharmaceutical Industries November 2017 futures traded at a premium of 1.55 points at 552.25 compared with spot closing of 550.70. The numbers of contracts traded were 15,671.

Among Nifty calls, 10400 SP from the November month expiry was the most active call with an addition of 0.05 million open interests. Among Nifty puts, 10300 SP from the November month expiry was the most active put with a contraction of 0.07 million open interests.  The maximum OI outstanding for Calls was at 10500 SP (6.14 mn) and that for Puts was at 10300 SP (6.09 mn). The respective Support and Resistance levels of Nifty are: Resistance 10424.40--- Pivot Point 10382.30--- Support --- 10357.45.

The Nifty Put Call Ratio (PCR) finally stood at 1.21 for November month contract. The top five scrips with highest PCR on OI were Godrej Consumer Products (4.15), JSW Energy (2.50), Dalmia Bharat (1.54), Dewan Housing Finance Corporation (1.41) and Maruti Suzuki India (1.41).

Among most active underlying, Reliance Industries witnessed a contraction of 6.09 million units of Open Interest in the November month futures contract, followed by State Bank of India witnessing  a contraction of 12.15 million units of Open Interest in the November month contract, Axis Bank witnessed a contraction of 8.73 million units of Open Interest in the November month contract, DLF witnessed a contraction of  6.22 million units of Open Interest in the November month contract and Infosys witnessed  a contraction of 5.24 million units of Open Interest in the November month future contract.