Nifty ends at fresh record high despite last hour profit booking

Indian equity benchmark Nifty managed to close at fresh record high on Thursday, with gains of over quarter a percent amid firm global cues. The index traded on a strong note for the most part of the session, supported by a healthy growth of government’s revenue collection during the first nine-and-a-half months of fiscal year 2017-18. For the period, direct tax collections stood at Rs 6.89 lakh crore, registering a growth of 18.7 percent higher than the net collections for the corresponding period of last year, mainly on account of a healthy growth in advance tax mop-up. Traders also took some encouragement with Commerce and Industries Minister Suresh Prabhu’s statement that Indian economy is likely to grow to $5 trillion over the next eight to nine years, backed by government’s focus on bridging digital divide which is also helping people scale up their income. Adding some optimism, Ratings agency Moody's Investors Service has said that the change in the borrowing of the government from Rs 50,000 crore to Rs 20,000 crore will not affect India's sovereign rating. Sentiments also got some support with India Ratings and Research’s latest report that the country's economic growth  is expected to improve to 7.1 per cent next fiscal from 6.5 per cent this year, buoyed by robust consumption demand and low commodity prices. However, Nifty pared gains in the last leg of the trade, on profit booking in recent gainers but still managed to end at fresh record high. Traders were eyeing the 25th GST Council meeting. Ahead of the meet, it has been reported that the Council may bring down taxes on as many as 70 goods.

Traders were seen piling up positions in IT, FMCG and Financial Services stocks, while selling was witnessed in Pharma, Metal and Media stocks. The top gainers from the F&O segment were MindTree, Godrej Consumer Products and ITC. On the other hand, the top losers were Just Dial, Reliance Communications and Adani Power. 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 0.72% and reached 13.96. The 50-share Nifty was up by 28.45 points or 0.26% to settle at 10,817.00.

Nifty January 2018 futures closed at 10810.80 on Thursday, at a discount of 6.20 points over spot closing of 10817.00, while Nifty February 2018 futures ended at 10832.65, at a premium of 15.65 points over spot closing. Nifty January futures saw an addition of 0.003 million (mn) units, taking the total outstanding open interest (OI) to 30.74 mn units. The near month derivatives contract will expire on January 25, 2018.

From the most active contracts, Yes Bank January 2018 futures traded at a discount of 5.90 points at 340.45 compared with spot closing of 346.35. The numbers of contracts traded were 40,263.

HDFC Bank January 2018 futures traded at a discount of 1.20 points at 1931.85 compared with spot closing of 1933.05. The numbers of contracts traded were 33,005.

State Bank of India January 2018 futures traded at a discount of 1.75 points at 303.05 compared with spot closing of 304.80. The numbers of contracts traded were 29,435.

Indiabulls Housing Finance January 2018 futures traded at a premium of 6.40 points at 1247.70 compared with spot closing of 1241.30. The numbers of contracts traded were 24,682.

ITC January 2018 futures traded at a discount of 1.00 point at 273.00 compared with spot closing of 274.00. The numbers of contracts traded were 22,128.

Among Nifty calls, 10900 SP from the January month expiry was the most active call with an addition of 1.63 million open interests. Among Nifty puts, 10800 SP from the January month expiry was the most active put with an addition of 2.08 million open interests.  The maximum OI outstanding for Calls was at 11000 SP (6.22 mn) and that for Puts was at 10500 SP (7.04 mn). The respective Support and Resistance levels of Nifty are: Resistance 10875.53--- Pivot Point 10828.97--- Support --- 10770.43.

The Nifty Put Call Ratio (PCR) finally stood at 1.48 for January month contract. The top five scrips with highest PCR on OI were Infosys (1.40), ICICI Bank (1.38), Jindal Steel & Power (1.24), Tech Mahindra (1.24) and Tata Consultancy Services (1.16).

Among most active underlying, State Bank of India witnessed a contraction of 9.30 million units of Open Interest in the January month futures contract, followed by HDFC Bank witnessing  a contraction of 1.91 million units of Open Interest in the January month contract, Yes Bank witnessed an addition of 0.11 million units of Open Interest in the January month contract, Maruti Suzuki India witnessed a contraction of  0.09 million units of Open Interest in the January month contract and ICICI Bank witnessed  a contraction of 0.26 million units of Open Interest in the January month future contract.