Nifty settles at fresh closing high

The local benchmarks Nifty settled at the fresh closing high on Monday, surpassing its crucial psychological level of 10,700, tracking firm Asian cues. The index traded on a strong note throughout the day, on back of positive IIP and WPI data. Industrial production growth accelerated to 25-month high of 8.4% in November 2017, as compared to 5.1% in November 2016, on the back of robust performance of manufacturing and capital goods sectors and wholesale price index-based inflation eased to a three-month low of 3.58 % in December, down from 3.93 % the month before. Traders also took some encouragement with the private report stating that the Indian economy is expected to witness an average GDP growth of 7.3 percent over 2020-22. The report also noted that the structural growth story in India remains strong from a medium term perspective. The market participants also took some support with report that the commerce ministry is working on new schemes for the next foreign trade policy (FTP), to be released in 2019-20, with a view to boost exports. Investors paid no heed towards the accelerated December Consumer Price Index (CPI) inflation data which has shot up to a 17-month high of 5.2% in the month of December 2017, as against 3.41% growth in December 2016 and a 15-month high of 4.88% November 2017, breaching the Reserve Bank of India’s medium-term target for the second straight month.

Traders were seen piling up positions in Metal, Media and Financial Services stocks, while selling was witnessed in IT, Pharma and FMCG stocks. The top gainers from the F&O segment were PC Jeweller, Housing Development Finance Corporation and the India Cements. On the other hand, the top losers were IDFC Bank, the Karnataka Bank and Idea Cellular. In the index option segment, maximum OI continues to be seen in the 10500-11100 calls and 10000-10700 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 4.17% and reached 14.30. The 50-share Nifty was up by 60.30 points or 0.56% to settle at 10,741.55.

Nifty January 2018 futures closed at 10743.30 on Monday, at a premium of 1.75 points over spot closing of 10741.55, while Nifty February 2018 futures ended at 10767.20, at a premium of 25.65 points over spot closing. Nifty January futures saw an addition of 1.02 million (mn) units, taking the total outstanding open interest (OI) to 29.75 mn units. The near month derivatives contract will expire on January 25, 2018.

From the most active contracts, Housing Development Finance Corporation January 2018 futures traded at a premium of 7.10 points at 1870.10 compared with spot closing of 1863.00. The numbers of contracts traded were 37,114.

HDFC Bank January 2018 futures traded at a premium of 1.65 points at 1894.70 compared with spot closing of 1893.05. The numbers of contracts traded were 27,291.

Capital First January 2018 futures traded at a premium of 6.20 points at 849.50 compared with spot closing of 843.30. The numbers of contracts traded were 26,243.

ICICI Bank January 2018 futures traded at a discount of 1.35 points at 328.10 compared with spot closing of 329.45. The numbers of contracts traded were 22,958.

IDFC Bank January 2018 futures traded at a premium of 0.05 points at 64.35 compared with spot closing of 64.30. The numbers of contracts traded were 22,893.

Among Nifty calls, 10800 SP from the January month expiry was the most active call with an addition of 0.94 million open interests. Among Nifty puts, 10700 SP from the January month expiry was the most active put with an addition of 2.89 million open interests.  The maximum OI outstanding for Calls was at 11000 SP (4.79 mn) and that for Puts was at 10500 SP (8.22 mn). The respective Support and Resistance levels of Nifty are: Resistance 10778.20--- Pivot Point 10746.00--- Support --- 10709.35.

The Nifty Put Call Ratio (PCR) finally stood at 1.61 for January month contract. The top five scrips with highest PCR on OI were Jindal Steel & Power (1.33), Wockhardt (1.24), Sun TV Network (1.20), Tech Mahindra (1.10) and Tata Steel (0.98).

Among most active underlying, Housing Development Finance Corporation witnessed an addition of 2.65 million units of Open Interest in the January month futures contract, followed by HDFC Bank witnessing  an addition of 1.29 million units of Open Interest in the January month contract, ICICI Bank witnessed an addition of 4.67 million units of Open Interest in the January month contract, Infosys  witnessed a contraction of  1.36 million units of Open Interest in the January month contract and Tata Steel  witnessed  an addition of 0.38 million units of Open Interest in the January month future contract.