Nifty settles slightly in green; near 10,600 mark

The local equity benchmark--Nifty--ended slightly in green near its crucial psychological level of 10,600 mark on Monday. The index made a cautious start but soon gained traction and entered into green terrain, aided by Economic Affairs Secretary Subhash Chandra Garg’s statement that India is poised to remain world’s fastest-growing large economy and it is on track to doubling the size of its economy to $5 trillion by the year 2025, as the economic reforms adopted over last few years and started yielding positive results. Investors remained optimistic, as the Reserve Bank of India’s (RBI) Governor Urjit Patel expressed hope that India’s pace of economic growth will accelerate in the fiscal year 2018-19. He noted that the country’s economy turned in a resilient performance in 2017-18. Besides, the market participants took some support with the Director of the International Monetary Fund’s (IMF) Asia and Pacific Department, Changyong Rhee’s statement that global investors feel that the Indian elephant is now ready to run after four years of impressive economic reforms. However, in the last leg of the trade, the Nifty pared most of its gains, as the domestic sentiments turned cautious with report that foreign investors have pulled out nearly Rs 8,000 crore from the Indian capital markets so far this month due to considerable volatility in global markets on account of the ongoing trade negotiations and firming up of bond yields. Moreover, anxiety spread among the traders, with PHD Chamber’s report that roadblocks such as delay in GST refunds and after effects of note ban hit India's export prospects in 2017-18 amid a revival in global demand mainly in key markets of the US and the EU. Some worries also came with a report that with the Reserve Bank giving no relaxation to its February 12 framework on resolution of stressed assets, banks are likely to become more cautious and risk-averse to long-term funding, especially to the infrastructure sector. The street also took note of Economist Intelligence Unit’s (EIU) report stating that a high-octane trade dispute between the world’s two largest economies -- the US and China -- will harm global trade this year as it would give rise to protectionism. Meanwhile, the International Monetary Fund said that the world’s debt load has ballooned to a record $164 trillion, a trend that could make it harder for countries to respond to the next recession and pay off debts if financing conditions tighten.

All the sectoral indices ended in green on the NSE except Financial Service, Metal and FMCG. The top gainers from the F&O segment were Cholamandalam Investment and Finance, Tata Elxsi and Max Financial Services. On the other hand, the top losers were Reliance Naval and Engineering, Hindalco, V-Guard Industries. In the index option segment, maximum OI continues to be seen in the 10,700-11,000 calls and 10,300-10,500 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 1.15% and reached 13.14. The 50-share Nifty was up by 20.65 points or 0.20% to settle at 10,584.70.

Nifty April 2018 futures closed at 10585.45 on Monday, at a premium of 0.75 points over spot closing of 10584.70, while Nifty May 2018 futures ended at 10612.80, at a premium of 28.10 points over spot closing. Nifty April futures saw a contraction of 1.72 million (mn) units, taking the total outstanding open interest (OI) to 24.67 mn units. The near month derivatives contract will expire on April 26, 2018.

From the most active contracts, Tata Consultancy Services April 2018 futures traded at a premium of 17.85 points at 3413.75 compared with spot closing of 3395.90. The numbers of contracts traded were 55,078.

Infosys April 2018 futures traded at a discount of 4.40 points at 1181.55 compared with spot closing of 1185.95. The numbers of contracts traded were 42,429.

HDFC Bank April 2018 futures traded at a discount of 6.95 points at 1932.55 compared with spot closing of 1939.50. The numbers of contracts traded were 23,194.

MindTree April 2018 futures traded at a discount of 3.50 points at 996.30 compared with spot closing of 999.80. The numbers of contracts traded were 20,629.

Indiabulls Housing Finance April 2018 futures traded at a premium of 1.00 points at 1323.00 compared with spot closing of 1322.00. The numbers of contracts traded were 18,274. 

Among Nifty calls, 10500 SP from the April month expiry was the most active call with a contraction of 0.36 million open interests. Among Nifty puts, 10500 SP from the April month expiry was the most active put with an addition of 0.27 million open interests. The maximum OI outstanding for Calls was at 10700 SP (4.85mn) and that for Puts was at 10500 SP (5.77mn). The respective Support and Resistance levels of Nifty are: Resistance 10,643.72 ---- Pivot Point 10,579.33 --- Support --- 10520.32.

The Nifty Put Call Ratio (PCR) finally stood at 1.53 for April month contract. The top five scrips with highest PCR on OI were Hindalco (1.36), TCS (1.36), Hindustan Unilever (1.22), JSW Steel (1.10) and Kotak Mahindra Bank (1.10).

Among most active underlying, Tata Consultancy Services witnessed a contraction of 0.53 million units of Open Interest in the April month futures contract, followed by Infosys witnessing a contraction of 6.15 million units of Open Interest in the April month contract, HDFC Bank witnessed a contraction of 2.10 million units of Open Interest in the April month contract, MindTree witnessed an addition of 0.19 million units of Open Interest in the April month contract and State Bank of India witnessed a contraction of 6.03 million units of Open Interest in the April month future contract.