Nifty snaps seven days losing streak; ends above 10,550 mark

Snapping seven days losing streak, the local equity benchmark Nifty ended higher on Thursday, with gain of around 1 percent, supported by firm cues from Asian markets. After making a positive start, the index maintained its upbeat mood throughout the session, as the market participants took some support with ASSOCHAM chief’s statement that the RBI’s decision to keep the policy rate unchanged is on the expected lines, though the less than hawkish stance has come about as a relief for the industry which had even feared a possible hike in the lending rates, following inflationary concerns. Besides, some optimism spread among the traders with report that the CBDT has directed the taxman not to undertake ‘coercive’ steps in recovering pending taxes from startups under a specific provision of the Income Tax Act, a move aimed to help budding entrepreneurs in the country. Separately, the government approved enhancement of the target of Pradhan Mantri Ujjwala Yojana (PMUY) from 5 crore to 8 crore with an additional allocation of Rs 4,800 crore. However, the Nifty trimmed some gains in the last leg of trade, as cautiousness spread among investors with the exporters’ body, Federation of Indian Export Organisations’ (FIEO) statement that liquidity problems emanating from delay in refund of Goods and Services Tax (GST) is forcing exporters to turn down new orders. It also noted that micro, small and medium enterprises (MSMEs) are cutting their workforce due to cash crunch.

All the sectoral indices ended in green on the NSE. The top gainers from the F&O segment were Cipla, Bharat Forge and Page Industries. On the other hand, the top losers were Hexaware Technologies, United Breweries and Aurobindo Pharma.  In the index option segment, maximum OI continues to be seen in the 10,600-11,100 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 decreased by 8.70% and reached 17.77. The 50-share Nifty was up by 100.15 points or 0.96% to settle at 10,576.85.

Nifty February 2018 futures closed at 10572.25 on Thursday, at a discount of 4.60 points over spot closing of 10576.85, while Nifty March 2018 futures ended at 10591.25, at a premium of 14.40 points over spot closing. Nifty February futures saw a contraction of 0.80 million (mn) units, taking the total outstanding open interest (OI) to 20.86 mn units. The near month derivatives contract will expire on February 22, 2018. 

From the most active contracts, Sun Pharmaceutical February 2018 futures traded at a discount of 0.25 points at 584.65 compared with spot closing of 584.90. The numbers of contracts traded were 28,333.

Vedanta February 2018 futures traded at a discount of 1.05 points at 314.60 compared with spot closing of 315.65. The numbers of contracts traded were 20,549.

Tata Steel 2018 futures traded at a premium of 1.00 point at 674.00 compared with spot closing of 673.00. The numbers of contracts traded were 18,167.

SBI February 2018 futures traded at a discount of 0.75 points at 301.50 compared with spot closing of 302.25. The numbers of contracts traded were 17,156.

Reliance Industries February 2018 futures traded at a discount of 1.50 points at 904.70 compared with spot closing of 906.20. The numbers of contracts traded were 14,600.

Among Nifty calls, 10700 SP from the February month expiry was the most active call with a contraction of 0.02 million open interests. Among Nifty puts, 10500 SP from the February month expiry was the most active put with an addition of 0.95 million open interests.  The maximum OI outstanding for Calls was at 11100 SP (5.79 mn) and that for Puts was at 10500 SP (5.88 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,649.92--- Pivot Point 10564.73--- Support --- 10,491.67.

The Nifty Put Call Ratio (PCR) finally stood at 0.87 for February month contract. The top five scrips with highest PCR on OI were Godfrey Phillips India (1.25), Berger Paints (1.10), Oracle Financial Services Software (1.00), ICICI Bank (0.94), and Godrej Consumer Products (0.87).

Among most active underlying, Reliance Industries  witnessed an addition of 0.71 million units of Open Interest in the February month futures contract, followed by State Bank of India witnessing an addition of 0.50 million units of Open Interest in the February month contract, Sun Pharmaceutical Industries witnessed an addition of 2.35 million units of Open Interest in the February month contract, ICICI Bank  witnessed a contraction of  2.24 million units of Open Interest in the February month contract and Tata Steel witnessed  an addition of 1.35 million units of Open Interest in the February month future contract.