Nifty ends flat with positive bias

The local equity benchmark Nifty ended flat with a positive bias on Tuesday. The index made a positive start and traded in green terrain for first half of the session, aided by ICRA’s latest report highlighting that the estimated surge in states’ borrowings in the first quarter do not reflect a deterioration of their financial health as it is driven more by the changes in central devolution. The report added that the planned increase in SDL (state development loans) issuance in Q1 of FY19 should not be construed as an indicator of a sharp fiscal deterioration of the states’ fiscal health. Besides, optimism remained on the street with finance ministry’s statement that World Bank will provide a $200 million loan to help the government achieve its goal of reducing stunting in children 0-6 years of age from 38.4 per cent to 25 per cent by the year 2022. Some gains also came with a private report stating that India is the only major world economy with a potential for talent surplus. The report further said that India may even challenge America’s position in technology, media and telecommunications (TMT) sector. However, in second half of the session, Nifty pared almost all its gains and ended flat as investors turned cautious with the United Nations’ (UN) latest report stating that the Goods and Services Tax (GST) as well as protracted issues of corporate and bank balance sheet problems pushed India's economic growth downward in 2017. However the report said a gradual recovery is expected and the country’s economy is forecast to grow at 7.2 per cent in 2018. Traders also got anxious with the private report stating that India has said that the US’ move to impose higher tariffs on steel and aluminium products on grounds of national security are an abuse of global trade provisions that could spiral into a trade war.   

Traders were seen piling up positions in PSU Bank, PVT Bank and Realty, while selling was witnessed in Media, IT and Auto. The top gainers from the F&O segment were ICICI Bank, Indian Bank and BEML. On the other hand, the top losers were PC Jeweller, United Spirits and IRB Infrastructure Developers. 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 2.14% and reached 14.05. The 50-share Nifty was up by 2.30 points or 0.02% to settle at 10,717.80.

Nifty May 2018 futures closed at 10735.05 on Tuesday, at a premium of 17.25 points over spot closing of 10717.80, while Nifty June 2018 futures ended at 10742.90, at a premium of 25.10 points over spot closing. Nifty May futures saw an addition of 0.11 million (mn) units, taking the total outstanding open interest (OI) to 23.97 mn units. The near month derivatives contract will expire on May 31, 2018.

From the most active contracts, ICICI Bank May 2018 futures traded at a discount of 0.65 points at 307.85 compared with spot closing of 308.50. The numbers of contracts traded were 60,839.

Jubilant Foodworks May 2018 futures traded at a premium of 18.45 points at 2574.40 compared with spot closing of 2555.95. The numbers of contracts traded were 56,799.

PC Jeweller May 2018 futures traded at a premium of 2.90 points at 203.40 compared with spot closing of 200.50. The numbers of contracts traded were 39,441.

State Bank of India May 2018 futures traded at a premium of 0.15 points at 250.45 compared with spot closing of 250.30. The numbers of contracts traded were 24,082.

Yes Bank May 2018 futures traded at a premium of 1.00 points at 345.05 compared with spot closing of 344.05. The numbers of contracts traded were 17,825.

Among Nifty calls, 10800 SP from the May month expiry was the most active call with a contraction of 0.09 million open interests. Among Nifty puts, 10700 SP from the May month expiry was the most active put with an addition of 0.25 million open interests. The maximum OI outstanding for Calls was at 11000 SP (5.70mn) and that for Puts was at 10500 SP (5.49mn). The respective Support and Resistance levels of Nifty are: Resistance 10,754.43 ---- Pivot Point 10,721.92 --- Support --- 10685.28.

The Nifty Put Call Ratio (PCR) finally stood at 1.27 for May month contract. The top five scrips with highest PCR on OI were Dish TV (1.63), Infibeam Incorporation (1.54), ICICI Bank (1.52), AXIS Bank (1.31) and MRF (1.00).

Among most active underlying, ICICI Bank witnessed an addition of 7.56 million units of Open Interest in the May month futures contract, followed by Jubilant Foodworks witnessing an addition of 0.29 million units of Open Interest in the May month contract, State Bank of India witnessed an addition of 1.45 million units of Open Interest in the May month contract, PC Jeweller witnessed an addition of 1.23 million units of Open Interest in the May month contract and Reliance Industries witnessed a contraction of 0.54 million units of Open Interest in the May month future contract.