Nifty ends higher; settles above 10,500 mark

The local equity benchmark Nifty ended higher on Monday, with the gains of around half a percent. The index traded in red terrain for first half of the session, as the sentiments got hit with a report stating that India’s merchandise exports fell for the first time in five months in March and the trade deficit widened amid concerns over global trade, and US moves to review a programme allowing duty-free imports of goods. India’s merchandise exports in March fell 0.7% year-on-year to $29.1 billion, and the trade deficit widened to $13.7 billion. Imports rose 7.2% on year to $42.8 billion in March. Some anxiety also spread on the street with a report highlighting that investments through Participatory notes (P-notes) plunged to nearly nine-year low of Rs 1.06 lakh crore in the capital market at March-end amid stringent norms put in place by the regulator SEBI to check misuse of these instruments. According to the SEBI data, total value of P-note investments in Indian markets -- equity, debt, and derivatives -- slumped to a low of Rs 1,06,403 crore at March-end from Rs 1,06,760 crore at the end of the preceding month. Prior to that, the figure was Rs 1.19 lakh crore. However, in second half of the session, the Nifty erased all of its losses and entered into green terrain aided by easing WPI inflation. India’s inflation on wholesale level also softened slightly in the month of March, aided by fall in prices of food articles, mainly pulses and vegetables. The Wholesale Price Index (WPI)-based inflation came in at 2.47% for March 2018, the lowest since July 2017. Market participants took some support with Asian Development Bank’s (ADB) statement that India will able to attain a growth of 8% in a significant manner if the country is able to reframe its investment parameter and make its exports competitive. Investors also took some support with the Reserve Bank of India’s data report stating that the country's foreign exchange reserves rose by $503.6 million to touch a life-time high of $424.864 billion in the week to April 6, aided by increase in foreign currency assets.

All the sectoral indices ended in green on the NSE except PSU Bank and IT. The top gainers from the F&O segment were DCB Bank, Cipla and Dewan Housing Finance. On the other hand, the top losers were Reliance Communications, Tata Motors and Tata Motors. In the index option segment, maximum OI continues to be seen in the 10,700-11,000 calls and 10,100-10,300 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 0.51% and reached 14.21. The 50-share Nifty was up by 47.75 points or 0.46% to settle at 10,528.35.

Nifty April 2018 futures closed at 10542.90 on Monday, at a premium of 14.55 points over spot closing of 10528.35, while Nifty May 2018 futures ended at 10571.00, at a premium of 42.65 points over spot closing. Nifty April futures saw an addition of 0.23 million (mn) units, taking the total outstanding open interest (OI) to 25.69 mn units. The near month derivatives contract will expire on April 26, 2018.

From the most active contracts, Infosys April 2018 futures traded at a discount of 2.45 points at 1132.05 compared with spot closing of 1134.50. The numbers of contracts traded were 42,132.

Tata Motors April 2018 futures traded at a premium of 0.30 points at 340.30 compared with spot closing of 340.00. The numbers of contracts traded were 22,644.

Dewan Housing Finance April 2018 futures traded at a premium of 2.15 points at 572.90 compared with spot closing of 570.75. The numbers of contracts traded were 19,085.

Tata Consultancy Services April 2018 futures traded at a premium of 1.10 points at 3186.15 compared with spot closing of 3185.05. The numbers of contracts traded were 14,193.

State Bank of India April 2018 futures traded at a premium of 0.90 points at 249.90 compared with spot closing of 249.00. The numbers of contracts traded were 12,792. 

Among Nifty calls, 10500 SP from the April month expiry was the most active call with a contraction of 0.23 million open interests. Among Nifty puts, 10400 SP from the April month expiry was the most active put with an addition of 0.48 million open interests. The maximum OI outstanding for Calls was at 10700 SP (4.41mn) and that for Puts was at 10300 SP (5.54mn). The respective Support and Resistance levels of Nifty are: Resistance 10,580.22 ---- Pivot Point 10,488.28 --- Support --- 10436.42.

The Nifty Put Call Ratio (PCR) finally stood at 1.45 for April month contract. The top five scrips with highest PCR on OI were Kotak Bank (1.43), Bajaj Finance (1.33), Eicher Motors (1.27), Hindalco (1.25) and ICICI Bank (1.19).

Among most active underlying, Infosys witnessed an addition of 0.24 million units of Open Interest in the April month futures contract, followed by Tata Consultancy Services witnessing an addition of 0.33 million units of Open Interest in the April month contract, Tata Motors witnessed an addition of 2.15 million units of Open Interest in the April month contract, State Bank of India witnessed an addition of 1.75 million units of Open Interest in the April month contract and Dewan Housing Finance witnessed a contraction of 0.92 million units of Open Interest in the April month future contract.