Nifty settles flat but hits fresh record closing high

Indian equity benchmark Nifty ended flat on Wednesday but managed to hit fresh record closing high. After a negative start, the index repeatedly altered between green and red terrain throughout the day, as the market participants were cautious ahead of January derivatives expiry on Thursday and ahead of the Union Budget next week. Some concerns also came with global rating agency, S&P ratings’ latest report ‘APAC Economic Snapshots, January 2018’, which stated that overall economic risks in India remain low, but risks from higher oil prices have reappeared. International oil prices have been rising which has also led to increased prices of petrol and diesel and a majority of India’s import bill stem from crude oil purchases. However, hopes of economic growth capped the losses and supported the Nifty to hit fresh record closing high. Traders took some encouragement with Niti Aayog’s former vice chairman Arvind Panagariya’s statement that India is headed to become the world’s fifth largest economy and it has the potential to achieve 10% growth rate. Some support also came with Union minister Piyush Goyal’s statement that there is a huge appetite for continuous surge in foreign investments in India with no comparable opportunity available worldwide.

Traders were seen piling up positions in PSU Banking, Pharma and IT stocks, while selling was witnessed in Realty, Metal and Media stocks. The top gainers from the F&O segment were NIIT Technologies, Amara Raja Batteries and Hexaware Technologies. On the other hand, the top losers were Dewan Housing Finance Corporation, Bharti Airtel and United Spirits. In the index option segment, maximum OI continues to be seen in the 10800-11300 calls and 10300-10900 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 11.19% and reached 18.04. The 50-share Nifty was up by 2.30 points or 0.02% to settle at 11,086.00.

Nifty January 2018 futures closed at 11083.20 on Wednesday, at a discount of 2.80 points over spot closing of 11086.00, while Nifty February 2018 futures ended at 11105.40, at a premium of 19.40 points over spot closing. Nifty January futures saw a contraction of 3.24 million (mn) units, taking the total outstanding open interest (OI) to 21.65 mn units. The near month derivatives contract will expire on January 25, 2018.

From the most active contracts, State Bank of India January 2018 futures traded at a discount of 0.65 points at 329.80 compared with spot closing of 330.45. The numbers of contracts traded were 40,046.

Tata Consultancy Services January 2018 futures traded at a discount of 2.65 points at 3172.30 compared with spot closing of 3174.95. The numbers of contracts traded were 28,799.

Sun Pharmaceutical Industries January 2018 futures traded at a discount of 0.55 points at 586.55 compared with spot closing of 587.10. The numbers of contracts traded were 28,733.

Indiabulls Housing Finance January 2018 futures traded at a premium of 3.95 points at 1362.40 compared with spot closing of 1358.45. The numbers of contracts traded were 28,588.

Infosys January 2018 futures traded at a discount of 0.80 point at 1182.05 compared with spot closing of 1182.85. The numbers of contracts traded were 28,384.

Among Nifty calls, 11100 SP from the January month expiry was the most active call with an addition of 0.32 million open interests. Among Nifty puts, 11000 SP from the January month expiry was the most active put with an addition of 0.17 million open interests.  The maximum OI outstanding for Calls was at 11200 SP (3.32 mn) and that for Puts was at 10500 SP (5.96 mn). The respective Support and Resistance levels of Nifty are: Resistance 11115.35--- Pivot Point 11080.75--- Support --- 11051.40.

The Nifty Put Call Ratio (PCR) finally stood at 2.16 for January month contract. The top five scrips with highest PCR on OI were the Tech Mahindra (1.79), ICICI Bank (1.52), Torrent Pharmaceuticals (1.48), Kotak Mahindra Bank (1.20) and Chennai Petroleum Corporation (1.19).

Among most active underlying, State Bank of India witnessed a contraction of 13.48 million units of Open Interest in the January month futures contract, Reliance Industries  witnessed a contraction of 11.56 million units of Open Interest in the January month contract, Infosys witnessed a contraction of  7.42 million units of Open Interest in the January month contract and Punjab National Bank witnessed  a contraction of 4.88 million units of Open Interest in the January month future contract.