Nifty ends higher for third straight session

Indian equity benchmark Nifty ended higher for third straight session on Monday, with the gains of 0.44%. The index traded in green throughout the session, as sentiments remained up-beat with Niti Aayog Vice Chairman Rajiv Kumar’s statement that India is likely to clock 7.5% Gross Domestic Product (GDP) growth in the financial year 2019, mainly due to improvement in investment cycle and capacity utilization. Besides, a foreign brokerage report highlighted that the Indian economy is witnessing a cyclical upswing and the country is likely to clock a GDP growth of 7.5% this financial year. The report added that this will mark an improvement from the 6.7% likely outturn in 2017-18. Traders also took some engorgement with Economic Affairs Secretary Subhash Chandra Garg’s  statement that the process of economic reforms is still continuing in reasonably major way and noted that there are no signs of de-reform in the system. The domestic sentiments also remained optimistic, as Reserve Bank of India (RBI) further liberalized ECB policy. In a bid to facilitate cheaper access of overseas funds, RBI liberalized External Commercial Borrowings (ECB) Policy by including more sectors in the window. Some support also came with a report that the Centre has a surplus of Rs 20,000 crore in the GST cess fund as of March 31 which will be used to compensate the states for revenue shortfall suffered due to the roll out of the Goods and Services Tax.

All the sectoral indices ended in green on the NSE. The top gainers from the F&O segment were Repco Home Finance, CG Power and Industrial Solutions and Balrampur Chini Mills. On the other hand, the top losers were PC Jeweller, SREI Infrastructure Finance and Can Fin Homes. In the index option segment, maximum OI continues to be seen in the 10,800-11,000 calls and 10,400-10,600 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 2.87% and reached 12.36. The 50-share Nifty was up by 47.05 points or 0.44% to settle at 10,739.35.

Nifty May 2018 futures closed at 10780.30 on Monday, at a premium of 40.95 points over spot closing of 10739.35, while Nifty June 2018 futures ended at 10788.90, at a premium of 49.55 points over spot closing. Nifty May futures saw an addition of 0.43 million (mn) units, taking the total outstanding open interest (OI) to 23.80 mn units. The near month derivatives contract will expire on May 31, 2018.

From the most active contracts, PC Jeweller May 2018 futures traded at a premium of 3.45 points at 145.35 compared with spot closing of 141.90. The numbers of contracts traded were 80,523.

Axis Bank May 2018 futures traded at a premium of 2.60 points at 521.10 compared with spot closing of 518.50. The numbers of contracts traded were 30,072.

Yes Bank May 2018 futures traded at a premium of 3.25 points at 364.20 compared with spot closing of 360.95. The numbers of contracts traded were 29,864.

Reliance Industries May 2018 futures traded at a premium of 5.00 points at 968.50 compared with spot closing of 963.50. The numbers of contracts traded were 22,586.

Dewan Housing Finance Corporation May 2018 futures traded at a premium of 4.00 points at 645.00 compared with spot closing of 641.00. The numbers of contracts traded were 17,537.

Among Nifty calls, 10800 SP from the May month expiry was the most active call with an addition of 0.05 million open interests. Among Nifty puts, 10700 SP from the May month expiry was the most active put with an addition of 0.63 million open interests. The maximum OI outstanding for Calls was at 11000 SP (5.68mn) and that for Puts was at 10600 SP (3.18mn). The respective Support and Resistance levels of Nifty are: Resistance 10,764.03 ---- Pivot Point 10,734.32 --- Support --- 10709.63.

The Nifty Put Call Ratio (PCR) finally stood at 1.22 for May month contract. The top five scrips with highest PCR on OI were Dish TV (2.76), AXIS Bank (1.35), Chennai Petroleum Corporation (1.27), Mangalore Refinery & Petrochemicals (1.05) and ICICI Bank (1.09).

Among most active underlying, Reliance Industries witnessed an addition of 1.33 million units of Open Interest in the May month futures contract, followed by Yes Bank witnessing a contraction of 2.51 million units of Open Interest in the May month contract, Axis Bank witnessed a contraction of 1.20 million units of Open Interest in the May month contract, PC Jeweller witnessed an addition of 5.31 million units of Open Interest in the May month contract and Kotak Mahindra Bank witnessed an addition of 0.36 million units of Open Interest in the May month future contract.