Nifty closes at record high as Economic Survey pegs higher GDP in FY19

Key Indian equity benchmark Nifty closed at fresh closing high on Monday, with gains of more than half a per cent. The index traded firm throughout the session amid report that that Goods and services tax (GST) receipts rose in December 2017, reversing the decline seen in the previous two months. According to the latest data released by the government, December GST revenue collection increased by 7.30% to Rs 86,703 crore as on January 24, 2018, as against Rs 80,808 crore in November month, despite the cut in tax rates on 178 goods from 28% to 18% in November. Sentiments were upbeat with Union Finance Minister Arun Jaitley’s statement that India can be among top 50 on World Bank’s ease of doing business index, if various machineries, including the tax department, make concerted efforts to improve the three laggard parameters. Adding some optimism, the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) has jumped to a six-month high of over Rs 1.5 lakh crore at the end of December, despite stringent norms put in place by markets regulator Securities and Exchange Board of India (SEBI) to check their misuse. The rally continued on the street, as Economic Survey pegged GDP growth at 7 to 7.5% in FY19 v/s 6.75% in FY18. It also noted that the average retail inflation has declined to a six-year low of 3.3% in 2017-18, with the economy moving towards a more stable price regime. Traders shrugged off the private report stating that India’s factory output growth in December 2017 is projected to come down to 5.5-6%, from a 17-month high of 8.4% in November last year.

Traders were seen piling up positions in Financial Services, IT and Metal stocks, while selling was witnessed in Realty, Pharma and FMCG stocks. The top gainers from the F&O segment were Can Fin Homes, Eicher Motors and Maruti Suzuki India. On the other hand, the top losers were Jaiprakash Associates, IFCI and Fortis Healthcare. In the index option segment, maximum OI continues to be seen in the 11000-12000 calls and 10500-11000 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 2.17% and reached 17.88. The 50-share Nifty was up by 60.75 points or 0.55% to settle at 11,130.40.

Nifty February 2018 futures closed at 11137.65 on Monday, at a premium of 7.25 points over spot closing of 11130.40, while Nifty March 2018 futures ended at 11160.40, at a premium of 30 points over spot closing. Nifty February futures saw an addition of 0.54 million (mn) units, taking the total outstanding open interest (OI) to 25.59 mn units. The near month derivatives contract will expire on February 22, 2018.

From the most active contracts, Maruti Suzuki India February 2018 futures traded at a premium of 26.85 points at 9639.30 compared with spot closing of 9612.45. The numbers of contracts traded were 38,001.

Housing Development Finance Corporation February 2018 futures traded at a discount of 0.55 points at 1970.95 compared with spot closing of 1971.50. The numbers of contracts traded were 21,918.

Vedanta February 2018 futures traded at a premium of 0.90 points at 346.80 compared with spot closing of 345.90. The numbers of contracts traded were 17,261.

Tata Steel February 2018 futures traded at a discount of 2.60 points at 781.10 compared with spot closing of 783.70. The numbers of contracts traded were 16,187.

Sun Pharmaceutical Industries February 2018 futures traded at a premium of 2.20 point at 588.05 compared with spot closing of 585.85. The numbers of contracts traded were 14,970.

Among Nifty calls, 11500 SP from the February month expiry was the most active call with an addition of 0.23 million open interests. Among Nifty puts, 11000 SP from the February month expiry was the most active put with an addition of 1.09 million open interests.  The maximum OI outstanding for Calls was at 12000 SP (2.78 mn) and that for Puts was at 10500 SP (5.14 mn). The respective Support and Resistance levels of Nifty are: Resistance 11175.98--- Pivot Point 11125.97--- Support --- 11080.38.

The Nifty Put Call Ratio (PCR) finally stood at 1.13 for February month contract. The top five scrips with highest PCR on OI were Berger Paints (3.56), Balkrishna Industries (2.53), Bosch (2.50), ICICI Bank (1.95) and SREI Infrastructure Finance (1.79).

Among most active underlying, Maruti Suzuki India witnessed a contraction of 0.23 million units of Open Interest in the February month futures contract, followed by Housing Development Finance Corporation witnessing an addition of 1.19 million units of Open Interest in the February month contract, ICICI Bank witnessed an addition of 2.39 million units of Open Interest in the February month contract, State Bank of India witnessed an addition of  0.34 million units of Open Interest in the February month contract and Reliance Industries witnessed  an addition of 0.80 million units of Open Interest in the February month future contract.