Nifty ends in positive territory

Indian equity benchmark Nifty ended in positive territory on Wednesday, with a gain around quarter a percent. Market started the session on a negative note as sentiments were dampened with report stating that India slipped to the 6th position globally in the business optimism index for the first quarter of this year. Business optimism is however at an all-time high globally with the index at net 61%, the highest figure recorded in 15 years of research. Traders remained concerned with a survey showing that optimism level among Chief Financial Officers about the country’s financial and macro-economic conditions for the second quarter of this year has declined nearly 18%, touching a four-year low. The composite CFO Optimism Index declined 17.8%, on a quarter-on-quarter basis, to 96.2 for the second quarter of 2018.  However, Nifty erased all losses and entered into green terrain with the International Monetary Fund (IMF) reaffirming that India will be the fastest growing major economy in 2018, with a growth rate of 7.4 percent that rises to 7.8 percent in 2019 with medium-term prospects remaining positive. Investors also took some encouragement with India Ratings’ report stating that Indian economy is gradually coming out of the twin shock of demonetisation and GST which temporarily derailed growth. Sentiments on the street remained optimistic with CRISIL’s report stating stated that a revival in rural demand may help boost the topline growth of the Rs 3.4-trillion fast moving consumer goods (FMCG) sector by 300-400 basis points to 11-12 per cent this financial year. 

Traders were seen piling up positions in Bank, IT and PVT Bank stocks, while selling was witnessed in FMCG, Media and PSU Bank. The top gainers from the F&O segment were Arvind, Tata Motors and Strides Shasun. On the other hand, the top losers were Cholamandalam Investment and Finance Company, NCC and Dalmia Bharat. 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 1.54% and reached 14.27. The 50-share Nifty was up by 23.90 points or 0.22% to settle at 10,741.70.

Nifty May 2018 futures closed at 10769.30 on Wednesday, at a premium of 27.60 points over spot closing of 10741.70, while Nifty June 2018 futures ended at 10777.00, at a premium of 35.30 points over spot closing.  Nifty May futures saw an addition of 0.41 million (mn) units, taking the total outstanding open interest (OI) to 24.38 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 2.20 points at 209.80 compared with spot closing of 207.60. The numbers of contracts traded were 27,699.

Jubilant Foodworks May 2018 futures traded at a premium of 17.85 points at 2566.80 compared with spot closing of 2548.95. The numbers of contracts traded were 26,612.

Tata Motors May 2018 futures traded at a premium of 1.95 points at 343.40 compared with spot closing of 341.45. The numbers of contracts traded were 25,866.

Arvind May 2018 futures traded at a premium of 2.20 points at 440.55 compared with spot closing of 438.35. The numbers of contracts traded were 24,661.

Tata Steel May 2018 futures traded at a premium of 0.85 points at 605.60 compared with spot closing of 604.75. The numbers of contracts traded were 15,940.

Among Nifty calls, 10800 SP from the May month expiry was the most active call with a contraction of 0.23 million open interests. Among Nifty puts, 10700 SP from the May month expiry was the most active put with an addition of 0.41 million open interests. The maximum OI outstanding for Calls was at 11000 SP (5.37mn) and that for Puts was at 10500 SP (5.67mn). The respective Support and Resistance levels of Nifty are: Resistance 10,775.35 ---- Pivot Point 10,732.60 --- Support --- 10698.95.

The Nifty Put Call Ratio (PCR) finally stood at 1.33 for May month contract. The top five scrips with highest PCR on OI were Infibeam Incorporation (1.51), Dish TV (1.50), AXIS Bank (1.43), ICICI Bank (1.42) and Lupin (0.93).

Among most active underlying, Arvind witnessed an addition of 0.68 million units of Open Interest in the May month futures contract, followed by Reliance Industries witnessing a contraction of 0.11 million units of Open Interest in the May month contract, ICICI Bank witnessed a contraction of 1.77 million units of Open Interest in the May month contract, Jubilant Foodworks witnessed a contraction of 0.33 million units of Open Interest in the May month contract and Tata Motors witnessed a contraction of 2.47 million units of Open Interest in the May month future contract.