Nifty extends gains for fifth straight session; surpasses 10,600 mark

Extending gains for the fifth straight session, key Indian benchmark Nifty closed at fresh record high on Monday and surpassed its crucial psychological level of 10,600 for the first time ever. After opening on a strong note, the index continued its rally throughout the session, as investors took some support with report that bank’s credit growth after a long gap grew in double digits to 10.65 per cent at Rs 80,96,727 crore in the fortnight ended December 22, 2017 due to the base effect. Traders also took some encouragement with the Chairman of the Economic Advisory Council to the Prime Minister (EAC-PM) Bibek Debroy’s statement that the estimated figures are mirroring the success of reform measures undertaken by the Government in the terms of yield, as 6.5% for the full year means that Q3 and Q4 numbers will be far better than first half of the year. Adding some optimism, NITI Aayog Vice-Chairman Rajiv Kumar said that it's an achievement that even after huge reforms like GST and demonetisation, India's GDP didn't face such reduction as in the early 90's. Besides, firm global cues along with Agriculture Ministry’s hopes for higher agriculture sector growth, too aided the sentiments. The agriculture ministry said that the country's agriculture sector is expected to grow higher than projected 2.1% growth by the CSO for the current fiscal, following better rabi crop prospects. Meanwhile, overseas investors poured in a staggering Rs 1.5 lakh crore in the Indian debt markets in 2017 on the back of higher bond yields and stable currency, after pulling out massive funds in the preceding year.

All the sectoral indices ended in the green on the NSE except PSU Bank. The top gainers from the F&O segment were IDFC Bank, Jindal Steel & Power and SREI Infrastructure Finance. On the other hand, the top losers were Idea Cellular, Bharti Airtel and Escorts. 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 4.75% and reached 13.73. The 50-share Nifty was up by 64.75 points or 0.61% to settle at 10,623.60.

Nifty January 2018 futures closed at 10631.40 on Monday, at a premium of 7.80 points over spot closing of 10623.60, while Nifty February 2018 futures ended at 10650.25, at a premium of 26.65 points over spot closing. Nifty January futures saw an addition of 1.04 million (mn) units, taking the total outstanding open interest (OI) to 26.31 mn units. The near month derivatives contract will expire on January 25, 2018.

From the most active contracts, Sun Pharmaceutical Industries January 2018 futures traded at a premium of 1.55 points at 593.05 compared with spot closing of 591.50. The numbers of contracts traded were 26,284.

Reliance Capital January 2018 futures traded at a premium of 4.20 points at 617.65 compared with spot closing of 613.45. The numbers of contracts traded were 24,395.

IDFC Bank January 2018 futures traded at a premium of 0.60 points at 63.70 compared with spot closing of 63.10. The numbers of contracts traded were 15,320.

Yes Bank January 2018 futures traded at a premium of 1.50 points at 334.65 compared with spot closing of 333.15. The numbers of contracts traded were 14,640.

Reliance Infrastructure January 2018 futures traded at a premium of 4.05 points at 584.35 compared with spot closing of 580.30. The numbers of contracts traded were 13,048.

Among Nifty calls, 10600 SP from the January month expiry was the most active call with a contraction of 0.35 million open interests. Among Nifty puts, 10500 SP from the January month expiry was the most active put with an addition of 1.22 million open interests.  The maximum OI outstanding for Calls was at 11000 SP (4.52 mn) and that for Puts was at 10400 SP (6.44 mn). The respective Support and Resistance levels of Nifty are: Resistance 10640.35--- Pivot Point 10614.45--- Support --- 10597.70.

The Nifty Put Call Ratio (PCR) finally stood at 1.30 for January month contract. The top five scrips with highest PCR on OI were Jindal Steel & Power (1.45), SREI Infrastructure Finance (1.22), Torrent Pharmaceuticals (1.13), Berger Paints (1.08) and Tata Steel (1.02).

Among most active underlying, Sun Pharmaceutical Industries witnessed a contraction of 0.81 million units of Open Interest in the January month futures contract, followed by Reliance Industries witnessing  an addition of 0.42 million units of Open Interest in the January month contract, State Bank of India witnessed an addition of 3.34 million units of Open Interest in the January month contract, Tata Steel witnessed an addition of  0.01 million units of Open Interest in the January month contract and Maruti Suzuki India witnessed  a contraction of 0.002 million units of Open Interest in the January month future contract.