Nifty settles higher; reclaims 10,500 mark

The Indian equity benchmark -- Nifty -- settled near the intraday high on Thursday, reclaiming its crucial psychological level of 10,500, with over half a percent gain. After a positive start, the index continued its gaining momentum till end of the session, tracking firm global cues. Traders were optimistic with the government’s reform push and positive services PMI data. The government has given green single to a revised model concession pact for projects based on public private partnership (PPP) design at major ports and capital infusion of Rs 7,577 crore in six weak public sector banks (PSBs) as part of the recapitalisation plan to bolster capital adequacy ratio. Furthermore, the Indian services sector bounced back to growth in the month of December. The Nikkei Services Business Activity Index rose to 50.9 in December from 48.5 in November. Similarly, the Nikkei India Composite PMI Output Index rose to 53 in December from 50.3 in November. Some support also came with NITI Aayog’s expectation that the first strategic disinvestment of Central Public Sector Enterprises will be conducted within the current financial year. It said that the process of divestment is being carried out by DIPAM (Department of Investment and Public Asset Management) and the first transactions are expected in the current financial year after a long gap of 14 years. Meanwhile, investors now await December-quarter results starting next week.

Traders were seen piling up positions in PSU Banking, Media and Metal stocks, while selling was witnessed in Auto and Realty stocks. The top gainers from the F&O segment were Reliance Communications, Jindal Steel & Power and IDBI Bank. On the other hand, the top losers were GMR Infrastructure, Oracle Financial Services Software and Reliance Naval and Engineering. 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 decreased by 1.52% and reached 13.41. The 50-share Nifty was up by 61.60 points or 0.59% to settle at 10,504.80.

Nifty January 2018 futures closed at 10526.20 on Thursday, at a premium of 21.40 points over spot closing of 10504.80, while Nifty February 2018 futures ended at 10549.85, at a premium of 45.05 points over spot closing. Nifty January futures saw an addition of 0.40 million (mn) units, taking the total outstanding open interest (OI) to 23.91 mn units. The near month derivatives contract will expire on January 25, 2018.

From the most active contracts, Jindal Steel & Power January 2018 futures traded at a premium of 2.50 points at 245.25 compared with spot closing of 242.75. The numbers of contracts traded were 31,927.

Tata Steel January 2018 futures traded at a discount of 1.50 points at 761.95 compared with spot closing of 763.45. The numbers of contracts traded were 28,771.

State Bank of India January 2018 futures traded at a premium of 0.45 points at 309.70 compared with spot closing of 309.25. The numbers of contracts traded were 20,894.

Punjab National Bank January 2018 futures traded at a discount of 1.20 points at 176.80 compared with spot closing of 178.00. The numbers of contracts traded were 17,352.

Vedanta January 2018 futures traded at a discount of 0.95 points at 340.55 compared with spot closing of 341.50. The numbers of contracts traded were 17,047.

Among Nifty calls, 10500 SP from the January month expiry was the most active call with a contraction of 0.42 million open interests. Among Nifty puts, 10400 SP from the January month expiry was the most active put with an addition of 0.70 million open interests.  The maximum OI outstanding for Calls was at 11000 SP (4.40 mn) and that for Puts was at 10400 SP (5.40 mn). The respective Support and Resistance levels of Nifty are: Resistance 10531.38--- Pivot Point 10486.42--- Support --- 10459.83.

The Nifty Put Call Ratio (PCR) finally stood at 1.16 for January month contract. The top five scrips with highest PCR on OI were Repco Home Finance (2.00), Jindal Steel & Power (1.40), NIIT Technologies (1.38), Torrent Pharmaceuticals (1.29) and SREI Infrastructure Finance (1.19).
Among most active underlying, Jindal Steel & Power witnessed an addition of 0.58 million units of Open Interest in the January month futures contract, followed by Tata Steelwitnessing  an addition of 1.00 million units of Open Interest in the January month contract, State Bank of India witnessed an addition of 1.20 million units of Open Interest in the January month contract, Larsen & Toubro witnessed a contraction of  0.06 million units of Open Interest in the January month contract and Maruti Suzuki India witnessed  an addition of 0.02 million units of Open Interest in the January month future contract.