Nifty extends northward journey for second straight session

Extending northward journey for second straight day, Indian equity benchmark -- Nifty -- ended higher on Wednesday, with the gains of more than quarter a per cent. The index traded positively throughout the session, amid reports that foreign portfolio investors (FPIs) bought shares worth Rs 344.16 crore, while domestic institutional investors (DIIs) made purchases worth Rs 731.17 crore on March 20. Sentiments were upbeat with former governor of Reserve Bank of India Raghuram Rajan’s statement that India should be thinking of the next 10 to 20 years when it would need a massive push to create jobs. Rajan enlightened that India could achieve even 10% growth if it built infrastructure, cleared the way for companies, eased the way for them to do business, and improved the quality of human capital including healthcare and education. Some support also came with the report that the government has extended the facility of hiring workers on fixed-term employment to all sectors to improve the ease of doing business. It has also agreed to the trade unions demand that no permanent employee be moved to fixed term employment. However, from early afternoon deals, the Nifty started trimming its gains to come off its day’s high point, as the volatility increased on the street ahead of the outcome of Federal Reserve's policy meeting due later today. Traders turned cautious with the private report stating that Indian firms are most concerned about the increase in protectionism across the world. The report noted that the perception of rising protectionism is much higher than the global average, where three in five (61 per cent) of the 6,000 companies surveyed, think that their governments are steadily moving towards protectionism. Some anxiety also spread among the market participants, with a foreign brokerage report which has downgraded its forecasts for India’s economy in the wake of a more than $2 billion fraud at Punjab National Bank, warning it could spark tighter regulation of the banking sector that would constrain credit growth. It lowered its real gross domestic product (GDP) forecast on India for the year to March 2019 to 7.6% from 8% earlier.

Traders were seen piling up positions in Realty, Financial Services and Banking stocks, while selling was witnessed in Media, Pharma and Metal stocks. The top gainers from the F&O segment were Reliance Communications, Balrampur Chini Mills and BEML. On the other hand, the top losers were Hindustan Construction, United Breweries and PC Jeweller.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 3.20% and reached 15.10. The 50-share Nifty was up by 30.90 points or 0.31% to settle at 10,155.25.

Nifty March 2018 futures closed at 10180.15 on Wednesday, at a premium of 24.90 points over spot closing of 10155.25, while Nifty April 2018 futures ended at 10218.30, at a premium of 63.05 points over spot closing. Nifty March futures saw a contraction of 0.18 million (mn) units, taking the total outstanding open interest (OI) to 22.93 mn units. The near month derivatives contract will expire on March 28, 2018.

From the most active contracts, Tata Steel March 2018 futures traded at a premium of 2.75 points at 585.05 compared with spot closing of 582.30. The numbers of contracts traded were 23,681.

State Bank of India March 2018 futures traded at a premium of 1.20 points at 248.65 compared with spot closing of 247.45. The numbers of contracts traded were 16,019.

Sun Pharmaceutical March 2018 futures traded at a premium of 1.75 points at 506.60 compared with spot closing of 504.85. The numbers of contracts traded were 13,759.

Reliance Industries March 2018 futures traded at a premium of 4.05 points at 900.05 compared with spot closing of 896.00. The numbers of contracts traded were 13,006.

Tata Motors March 2018 futures traded at a premium of 0.15 points at 334.95 compared with spot closing of 334.80. The numbers of contracts traded were 12,273.

Among Nifty calls, 10300 SP from the March month expiry was the most active call with a contraction of 0.12 million open interests. Among Nifty puts, 10100 SP from the March month expiry was the most active put with a contraction of 0.31 million open interests. The respective Support and Resistance levels of Nifty are: Resistance 10,210.72 ---- Pivot Point 10,171.83 --- Support --- 10116.37.

The Nifty Put Call Ratio (PCR) finally stood at 0.78 for March month contract. The top five scrips with highest PCR on OI were Andhra Bank (1.16), Allahabad Bank (1.11), IndusInd Bank (1.10) Axis Bank (1.07) and Kaveri Seed (0.94).

Among most active underlying, Reliance Industries witnessed a contraction of 1.77 million units of Open Interest in the March month futures contract, followed by Tata Steel witnessing a contraction of 0.36 million units of Open Interest in the March month contract, State Bank of India witnessed a contraction of 0.71 million units of Open Interest in the March month contract, Maruti Suzuki India witnessed a contraction of 0.08 million units of Open Interest in the March month contract and Jubilant Foodworks witnessed a contraction of 0.03 million units of Open Interest in the March month future contract.