Nifty ends flat with positive bias

The local equity benchmark -- Nifty -- ended flat with a positive bias on Monday. After a positive start, the index traded in positive territory in morning deals, supported by Global rating agency Fitch’s statement that India’s economic growth is likely to accelerate to 7.3 percent in FY19 and 7.5 percent in FY20 on the back of recovery in money supply to its pre-demonetisation level. Moreover, disruptions related to the rollout of GST have also eased and will support in the growth of Indian economy. The domestic sentiments were also upbeat with a private report stating that India was the largest remittance-receiving country in the world, with migrant workers from the country sending home $69 billion in 2017, according to a report which said remittances to the Asia-Pacific region amounted to $256 billion last year. However, in noon deals, the Nifty erased all its gains and slipped into red terrain, as sentiments turned pessimistic after weak macro-economic data. India’s wholesale price inflation (WPI) climbed to 3.18% in April 2018 from 2.47% in March 2018, while Index of Industrial Production (IIP) slowed down to 4.4% in the month of March 2018, as compared to 7.1% growth recorded in previous month. Besides, a private report noting that the Reserve Bank is expected to begin its rate hike cycle from December quarter, and may go for three rate hikes by 2019 taking the key policy rate to 6.75%, also weighed on the sentiments. But, the market managed to recover from the losses and ended flat.

Traders were seen piling up positions in Banking, Pharma and Financial Services stocks, while selling was witnessed in Metal, Media and IT sector stocks. The top gainers from the F&O segment were Sun TV Network, The South Indian Bank and InterGlobe Aviation. On the other hand, the top losers were Reliance Naval and Engineering, PC Jeweller and Adani Power. 

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 1.91% and reached 14.24. The 50-share Nifty was up by 0.10 points to settle at 10,806.60.

Nifty May 2018 futures closed at 10814.70 on Monday, at a premium of 8.10 points over spot closing of 10806.60, while Nifty June 2018 futures ended at 10821.95, at a premium of 15.35 points over spot closing. Nifty May futures saw a contraction of 0.52 million (mn) units, taking the total outstanding open interest (OI) to 24.55 mn units. The near month derivatives contract will expire on May 31, 2018.

From the most active contracts, Sun TV Network May 2018 futures traded at a premium of 7 points at 966.90 compared with spot closing of 959.90. The numbers of contracts traded were 28,324.

Canara Bank May 2018 futures traded at a premium of 2.40 points at 250.40 compared with spot closing of 248.00. The numbers of contracts traded were 22,886.

Tata Global Beverages May 2018 futures traded at a discount of 1.40 points at 255.60 compared with spot closing of 257.00. The numbers of contracts traded were 19,709.

PC Jeweller May 2018 futures traded at a premium of 0.55 points at 178.20 compared with spot closing of 177.65. The numbers of contracts traded were 15,178.

Sun Pharmaceutical Industries May 2018 futures traded at a premium of 2.25 points at 475.25 compared with spot closing of 473.00. The numbers of contracts traded were 14,581.

Among Nifty calls, 11000 SP from the May month expiry was the most active call with an addition of 0.15 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 (6.14 mn) and that for Puts was at 10500 SP (6.67 mn). The respective Support and Resistance levels of Nifty are: Resistance 10836.05---- Pivot Point 10805.40--- Support --- 10775.95.

The Nifty Put Call Ratio (PCR) finally stood at 1.39 for May month contract. The top five scrips with highest PCR on OI were Dish TV (1.53), Axis Bank (1.51), Asian Paint (1.51), Infibeam Incorporation (1.45) and ICICI Bank (1.40). 

Among most active underlying, Sun TV Network witnessed an addition of 0.49 million units of Open Interest in the May month futures contract, followed by Tata Global Beverages witnessing an addition of 2.74 million units of Open Interest in the May month contract, State Bank of India witnessed a contraction of 3.66 million units of Open Interest in the May month contract, Reliance Industries witnessed a contraction of 0.26 million units of Open Interest in the May month contract and HDFC Bank witnessed a contraction of 0.19 million units of Open Interest in the May month future contract.