Nifty ends in green, just shy of 10,700 mark

 Indian equity benchmark Nifty closed higher with gains of 0.70% on last trading day of the week. The index remained bullish throughout the session, on the back of firm global cues coupled with positive results. The traders took some encouragement with private report stating that India’s economic growth will accelerate to 7.2 per cent in the current fiscal buoyed by manufacturing activity even as rising oil prices and high government debt remain a challenge. The report further noted that the agriculture sector is expected to grow higher than the estimated 2.1 per cent in the current fiscal year on account of positive prospects on Rabi harvest and a normal monsoon, contributing significantly to the national GDP. Some support also came with Government think-tank NITI Aayog’s statement that 3.53 million (35.3 lakh) new jobs were generated between September 2017 and February this year. The EPFO data shows that from September 2017 to February 2018, 3.1 million (31.10 lakh) new payroll additions were made across all age groups. The domestic sentiments also remained upbeat with CII’s President, Rakesh Bharti Mittal’s statement that the demand in the economy is picking up and it is time private investment started flowing in. He added that the government must focus on labour reforms to spur job creation in the organised sector and give immediate attention to agriculture. Adding to the optimism, global credit rating agency Fitch affirmed India’s sovereign rating at ‘BBB-’ with stable outlook, saying that the country’s medium-term growth potential is strong. The agency added that India’s rating balances a strong medium-term growth outlook and favourable external balances with weak fiscal finances and some lagging structural factors, including governance standards and a still-difficult, but improving, business environment. It projected India’s growth at 7.3% in current the fiscal and further to 7.5% in 2019-20.

All the sectoral indices ended in green on the NSE except IT. The top gainers from the F&O segment were Axis Bank, Andhra Bank and Oriental Bank of Commerce. On the other hand, the top losers were PC Jeweller, Reliance Naval and Engineering and InterGlobe Aviation. In the index option segment, maximum OI continues to be seen in the 10,700-11,000 calls and 10,200-10,500 puts indicating this is the trading range expectation.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 0.17% and reached 12.01. The 50-share Nifty was up by 74.50 points or 0.70% to settle at 10,692.30.

Nifty May 2018 futures closed at 10723.80 on Friday, at a premium of 31.50 points over spot closing of 10692.30, while Nifty June 2018 futures ended at 10729.90, at a premium of 37.60 points over spot closing. Nifty May futures saw an addition of 0.94 million (mn) units, taking the total outstanding open interest (OI) to 23.36 mn units. The near month derivatives contract will expire on May 31, 2018.

From the most active contracts, Axis Bank May 2018 futures traded at a premium of 0.35 points at 540.35 compared with spot closing of 540.00. The numbers of contracts traded were 84,143.

Maruti Suzuki May 2018 futures traded at a premium of 53.70 points at 8822.70 compared with spot closing of 8769.00. The numbers of contracts traded were 54,077.

Yes Bank May 2018 futures traded at a premium of 1.75 points at 350.40 compared with spot closing of 348.65. The numbers of contracts traded were 45,245.

PC Jeweller May 2018 futures traded at a premium of 8.40 points at 179.40 compared with spot closing of 171.00. The numbers of contracts traded were 40,341.

Reliance Industries May 2018 futures traded at a premium of 0.90 points at 997.40 compared with spot closing of 996.50. The numbers of contracts traded were 28,036.  

Among Nifty calls, 11000 SP from the May month expiry was the most active call with an addition of 0.72 million open interests. Among Nifty puts, 10600 SP from the May month expiry was the most active put with an addition of 0.72 million open interests. The maximum OI outstanding for Calls was at 11000 SP (5.11mn) and that for Puts was at 10500 SP (3.76mn). The respective Support and Resistance levels of Nifty are: Resistance 10,725.55 ---- Pivot Point 10,686.55 --- Support --- 10653.30.

The Nifty Put Call Ratio (PCR) finally stood at 1.20 for May month contract. The top five scrips with highest PCR on OI were Dish TV (2.76), AXIS Bank (1.60), Chennai Petroleum Corporation (1.50), Hindustan Construction (1.13) and ICICI Bank (1.09).

Among most active underlying, Axis Bank witnessed an addition of 7.64 million units of Open Interest in the May month futures contract, followed by Maruti Suzuki witnessing an addition of 0.30 million units of Open Interest in the May month contract, Reliance Industries witnessed a contraction of 0.32 million units of Open Interest in the May month contract, Yes Bank witnessed a contraction of 3.02 million units of Open Interest in the May month contract and State Bank of India witnessed a contraction of 0.20 million units of Open Interest in the May month future contract.