Nifty settles slightly higher

The benchmark index Nifty ended slightly higher on Tuesday, supported by firm Asian cues. The index made a good start but soon turned choppy, as retail inflation for industrial workers rose to 3.97 per cent in November 2017 as compared to 3.24 per cent for the previous month, mainly due to surge in prices of food items, kerosene and cooking gas. Some concerns also came with the report which has pointed oil, inflation as risk factors, stating that India's economic growth is likely to pick up in the New Year but rising oil prices and a firming inflation may spoil the party. However, at the end, the Nifty managed to keep its head above water, on the back of positive core sector data and Manufacturing PMI. The growth of eight core infrastructure industries expanded at a faster pace to a thirteen-month high of 6.8% in November 2017, from 4.7% in October and Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - rose to 54.7 in December from 52.6 in November. Some support also came with the government’s decision to ease norms for rectification of GST returns. The Finance Ministry has permitted businesses to rectify mistakes in their monthly returns - GSTR-3B - and adjust tax liability, a move that will help them file correct returns without fear of penalty. On the sectoral front, telecom stocks ended lower after Telecom Regulatory Authority of India (TRAI) on Tuesday instructed all telecom operators in India to follow the new interconnection agreement set by them.

Traders were seen piling up positions in IT, Auto and Metal stocks, while selling was witnessed in Realty, Media and Pharma stocks. The top gainers from the F&O segment were NMDC, Tata Motors and Dish TV India. On the other hand, the top losers were Reliance Naval and Engineering, Reliance Communications and Reliance Power. In the index option segment, maximum OI continues to be seen in the 10400-11000 calls and 10000-10500 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 2.49% and reached 13.68. The 50-share Nifty was up by 6.65 points or 0.06% to settle at 10,442.20.

Nifty January 2018 futures closed at 10472.20 on Tuesday, at a premium of 30 points over spot closing of 10442.20, while Nifty February 2018 futures ended at 10494.55, at a premium of 52.35 points over spot closing. Nifty January futures saw a contraction of 0.15 million (mn) units, taking the total outstanding open interest (OI) to 22.72 mn units. The near month derivatives contract will expire on January 25, 2018.

From the most active contracts, Tata Motor January 2018 futures traded at a premium of 2.55 points at 440.75 compared with spot closing of 438.20. The numbers of contracts traded were 34,655.

Reliance Capital January 2018 futures traded at a premium of 2.95 points at 599.15 compared with spot closing of 596.20. The numbers of contracts traded were 32,529.

Reliance Power January 2018 futures traded at a premium of 0.60 points at 57.20 compared with spot closing of 56.60. The numbers of contracts traded were 17,547.

Reliance Naval and Engineering January 2018 futures traded at a premium of 0.70 points at 60.20 compared with spot closing of 59.50. The numbers of contracts traded were 17,142.

Ashok Leyland January 2018 futures traded at a premium of 0.55 points at 124.05 compared with spot closing of 123.50. The numbers of contracts traded were 16,341.

Among Nifty calls, 10500 SP from the January month expiry was the most active call with an addition of 0.56 million open interests. Among Nifty puts, 10400 SP from the January month expiry was the most active put with an addition of 0.81 million open interests.  The maximum OI outstanding for Calls was at 11000 SP (4.41 mn) and that for Puts was at 10300 SP (4.99 mn). The respective Support and Resistance levels of Nifty are: Resistance 10490.05--- Pivot Point 10447.35--- Support --- 10399.50.

The Nifty Put Call Ratio (PCR) finally stood at 1.09 for January month contract. The top five scrips with highest PCR on OI were Repco Home Finance (2.40), the Ramco Cements (1.80), Godfrey Phillips India (1.20), BOSCH (1.17) and Rural Electrification Corporation (1.10).

Among most active underlying, Tata Motors witnessed a contraction of 0.18 million units of Open Interest in the January month futures contract, followed by Maruti Suzuki India  witnessing  an addition of 0.04 million units of Open Interest in the January month contract, Reliance Power witnessed a contraction of 1.79 million units of Open Interest in the January month contract, Reliance Industries witnessed an addition of  0.28 million units of Open Interest in the January month contract and State Bank of India witnessed  a contraction of 1.13 million units of Open Interest in the January month future contract.