Nifty ends marginally higher

Indian equity benchmark Nifty ended slightly higher on Tuesday. The index made an optimistic start, on back of normal Monsoon forecast. The India Meteorological Department (IMD), the country’s national weather forecaster, said that India would receive ‘normal’ monsoon for the third straight year. It noted that seasonal monsoon rainfall is likely to be 97 percent of the long period average (LPA) in 2018, with a margin error of plus or minus 5 percent. Some support also came with the World Bank’s latest report forecasting that India’s economic growth will accelerate to 7.3% in the year 2018 from 6.7% in 2017. It added that the gross domestic product (GDP) growth rate will increase further to 7.5% in the following two years - 2019 and 2020. However, in noon deals, the market lost gaining momentum and slipped into red terrain, as anxiety spread on the street with former President Pranab Mukherjee’s statement that the country’s demographic dividend runs the risk of turning into a demographic disaster if employment is not generated. He added that the country has achieved an economic growth of 6-8% in the last couple of decades but the inequality among different classes of the society is still huge and unacceptable. Sentiments also remained down-beat on media report that the shortage of currency reported in Andhra Pradesh, Telangana and Madhya Pradesh in the past few weeks has spread to a few more states. The shortage is being felt despite currency in circulation crossing the pre-demonetization level. However, in the last leg of the trade, the Nifty erased all of its losses to come back in green terrain, tracking firm cues from European markets. Traders got relief with Finance Minister Arun Jaitley’s statement that there is more than adequate currency in circulation and with the banks.

Traders were seen piling up positions in FMCG, Reality and Fin Service stocks, while selling was witnessed in PSU Bank, Pharma and Media. The top gainers from the F&O segment were DCB Bank, South Indian Bank and Jet Airways. On the other hand, the top losers were IRB Infrastructure, Canara Bank and Dalmia Bharat. In the index option segment, maximum OI continues to be seen in the 10,700-11,000 calls and 10,200-10,400 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 1.53% and reached 14.04. The 50-share Nifty was up by 20.35 points or 0.19% to settle at 10,548.70.

Nifty April 2018 futures closed at 10551.20 on Tuesday, at a premium of 2.50 points over spot closing of 10548.70, while Nifty May 2018 futures ended at 10579.35, at a premium of 30.65 points over spot closing. Nifty April futures saw an addition of 0.42 million (mn) units, taking the total outstanding open interest (OI) to 26.11 mn units. The near month derivatives contract will expire on April 26, 2018.

From the most active contracts, State Bank of India April 2018 futures traded at a premium of 0.60 points at 248.75 compared with spot closing of 248.15. The numbers of contracts traded were 15,365.

Tata Motor April 2018 futures traded at a premium of 1.00 points at 337.70 compared with spot closing of 336.70. The numbers of contracts traded were 15,321.

Tata Steel April 2018 futures traded at a premium of 1.45 points at 596.65 compared with spot closing of 595.20. The numbers of contracts traded were 14,877.

Vedanta April 2018 futures traded at a premium of 1.45 points at 289.55 compared with spot closing of 288.10. The numbers of contracts traded were 14,289.

Dewan Housing Finance April 2018 futures traded at a premium of 3.90 points at 591.50 compared with spot closing of 587.60. The numbers of contracts traded were 13,702.

Among Nifty calls, 10600 SP from the April month expiry was the most active call with an addition of 0.28 million open interests. Among Nifty puts, 10500 SP from the April month expiry was the most active put with an addition of 0.56 million open interests. The maximum OI outstanding for Calls was at 10700 SP (4.63mn) and that for Puts was at 10400 SP (5.26mn). The respective Support and Resistance levels of Nifty are: Resistance 10,574.22 ---- Pivot Point 10,534.93 --- Support --- 10509.42.

The Nifty Put Call Ratio (PCR) finally stood at 1.44 for April month contract. The top five scrips with highest PCR on OI were ICICI Bank (1.26), Kotak Bank (1.25), Hindustan Unilever (1.25), Bajaj Finance (1.18) and Wipro (1.10).

Among most active underlying, Infosys witnessed an addition of 1.00 million units of Open Interest in the April month futures contract, followed by Titan witnessing an addition of 0.72 million units of Open Interest in the April month contract, State Bank of India witnessed an addition of 0.96 million units of Open Interest in the April month contract, Hindalco witnessed an addition of 2.17 million units of Open Interest in the April month contract and ICICI Bank witnessed a contraction of 0.78 million units of Open Interest in the April month future contract.