Nifty ends near day’s high

Indian local benchmark Nifty ended in green on Monday near its intraday high point, with the gains of around a percent. After a positive start, the index continued its northward rally till end of the session, supported by the Asian Development Bank (ADB) Chief Economist Yasuyuki Sawada’s statement that India’s projected GDP growth of over 7% for the current fiscal is amazingly fast and if this momentum is maintained, the size of the economy can double within a decade. He also said that the country shouldn’t worry about not achieving 8% growth but focus on increasing domestic demand by reducing the income inequality. Sentiments on the street remained upbeat as SBI Research in its latest report expressed hopes that the Goods and Services Tax (GST) collection will be very good in the ongoing financial year (FY19) and revenue target of Rs 12.9 trillion also seems feasible, with government introducing various anti-evasion measures like TDS, TCS and credit matching. Further, traders also took some encouragement with Commerce and Industry Minister Suresh Prabhu’s statement that his ministry is actively working on strategy that seeks to promote services exports, which have the potential to boost overall foreign shipments and India’s real gross domestic product (GDP) growth in the coming years. He also noted that services are going to be a big dominant part of the Indian economy. Adding some optimism, another SBI Research’s report highlighted that India’s unemployment rate halved from 9.5% in August 2016 to 4.8% in February this year and among major states, a sharp decline was registered in Uttar Pradesh. The market participants paid no heed towards the report which stated that foreign investors have pulled out over Rs 15,500 crore from the Indian capital market in April, making it the steepest outflow in 16 months, due to surge in global crude prices and rise in yields of government securities here. This comes after an inflow of Rs 11,654 crore in equities in March and an outflow of over Rs 9,000 crore from the debt market during the same period.

All the sectoral indices ended in green on the NSE, except IT and Pharma. The top gainers from the F&O segment were PC Jeweller, Balrampur Chini Mills and Jindal Steel & Power. On the other hand, the top losers were Wockhardt, Ujjivan Financial Services and Strides Shasun. In the index option segment, maximum OI continues to be seen in the 10,800-11,000 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 3.85% and reached 13.76. The 50-share Nifty was up by 97.25 points or 0.92% to settle at 10,715.50.

Nifty May 2018 futures closed at 10739.85 on Monday, at a premium of 24.35 points over spot closing of 10715.50, while Nifty June 2018 futures ended at 10748.60, at a premium of 33.10 points over spot closing. Nifty May futures saw an addition of 0.24 million (mn) units, taking the total outstanding open interest (OI) to 23.86 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 discount of 0.15 points at 242.00 compared with spot closing of 242.15. The numbers of contracts traded were 31,297.

ICICI Bank May 2018 futures traded at a discount of 1.95 points at 291.05 compared with spot closing of 293.00. The numbers of contracts traded were 18,398.

Jindal Steel & Power May 2018 futures traded at a premium of 2.15 points at 257.90 compared with spot closing of 255.75. The numbers of contracts traded were 14,420.

Vedanta May 2018 futures traded at a premium of 2.05 points at 286.65 compared with spot closing of 284.60. The numbers of contracts traded were 13,590.

Tata Steel May 2018 futures traded at a premium of 2.85 points at 599.10 compared with spot closing of 596.25. The numbers of contracts traded were 13,111.

Among Nifty calls, 10700 SP from the May month expiry was the most active call with a contraction of 0.40 million open interests. Among Nifty puts, 10600 SP from the May month expiry was the most active put with an addition of 0.60 million open interests. The maximum OI outstanding for Calls was at 11000 SP (5.69mn) and that for Puts was at 10500 SP (5.17mn). The respective Support and Resistance levels of Nifty are: Resistance 10,748.88 ---- Pivot Point 10,692.27 --- Support --- 10658.88.

The Nifty Put Call Ratio (PCR) finally stood at 1.26 for May month contract. The top five scrips with highest PCR on OI were Dish TV (1.80), Infibeam Incorporation (1.57), Godrej Consumer Products (1.24), AXIS Bank (1.23) and ICICI Bank (1.20).

Among most active underlying, ICICI Bank witnessed an addition of 2.63 million units of Open Interest in the May month futures contract, followed by Reliance Industries witnessing a contraction of 0.68 million units of Open Interest in the May month contract, Exide Industries witnessed an addition of 1.27 million units of Open Interest in the May month contract, State Bank of India witnessed an addition of 0.74 million units of Open Interest in the May month contract and PC Jeweller witnessed a contraction of 3.75 million units of Open Interest in the May month future contract.