Nifty ends marginally higher

Key Indian equity benchmark Nifty ended marginally higher on Tuesday. The index managed to trade in green for most part of the session, aided by positive economic growth forecasts. ICRA in its latest report has said that India’s GDP growth is expected to improve to 7.4% in January-March quarter of 2017-18 (Q4FY18) from 7.2% in Q3FY18, while NITI Aayog vice-chairman Rajiv Kumar has expressed confidence that Indian economy will grow at the rate of 9% on sustained basis by 2022, on account of the government’s various reform measures like Goods and Service Tax (GST), demonetization, recapitalisation of bank and the Insolvency and Bankruptcy Code (IBC). Further, the broader markets were performing better than the larger peers with the notable gains. Traders took some support with a report stating that the central government’s capital expenditure in April 2018 saw a jump of 48% compared with the same month last year, the consequence of a second consecutive year of an advanced budget. The biggest gainers as a result of this capex boost were ministries of defence, railways and road transport. However, the trade was volatile, as anxiety spread on the street with SBI’s Ecowrap report stating that India’s current account deficit is expected to widen to 2.5% of the GDP in the financial year 2018-19, on the back of rise in the crude oil prices. The market participants were cautious with a foreign brokerages’ report stating that rise in oil prices may lead to inflationary trends in the country, forcing the Reserve Bank of India (RBI) to hike rates by 0.25% in the August policy review. It further noted that the apex bank, however, may opt for a status quo in rates at the forthcoming review in June.

All the sectoral indices ended in green on the NSE except FMCG and PVT Bank. The top gainers from the F&O segment were PC Jeweller, Strides Shasun and Balrampur Chini Mills. On the other hand, the top losers were Mahanagar Gas, Indian Oil Corporation and Cadila Healthcare. 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 decreased by 5.60% and reached 13.60. The 50-share Nifty was up by 20.00 points or 0.19% to settle at 10,536.70.

Nifty May 2018 futures closed at 10552.85 on Tuesday, at a premium of 16.15 points over spot closing of 10536.70, while Nifty June 2018 futures ended at 10568.00, at a premium of 31.30 points over spot closing. Nifty May futures saw a contraction of 0.17 million (mn) units, taking the total outstanding open interest (OI) to 23.04 mn units. The near month derivatives contract will expire on May 31, 2018.

From the most active contracts, State Bank of India May 2018 futures traded at a discount of 1.00 points at 254.70 compared with spot closing of 255.70. The numbers of contracts traded were 78,051.

DLF May 2018 futures traded at a premium of 1.05 points at 198.70 compared with spot closing of 197.65. The numbers of contracts traded were 27,939.

Tata Motors May 2018 futures traded at a premium of 1.05 points at 309.05 compared with spot closing of 308.00. The numbers of contracts traded were 26,521.

Ashok Leyland May 2018 futures traded at a premium of 0.05 points at 141.60 compared with spot closing of 141.55. The numbers of contracts traded were 25,086.

Dr Reddy's Laboratories May 2018 futures traded at a premium of 11.80 points at 2016.00 compared with spot closing of 2004.20. The numbers of contracts traded were 21,356.

Among Nifty calls, 10600 SP from the May month expiry was the most active call with a contraction of 0.01 million open interests. Among Nifty puts, 10500 SP from the May month expiry was the most active put with a contraction of 0.19 million open interests. The maximum OI outstanding for Calls was at 10800 SP (6.47mn) and that for Puts was at 10500 SP (5.23mn). The respective Support and Resistance levels of Nifty are: Resistance 10,566.68 ---- Pivot Point 10,528.62 --- Support --- 10498.63.

The Nifty Put Call Ratio (PCR) finally stood at 0.90 for May month contract. The top five scrips with highest PCR on OI were Asian Paint (1.46), Dish TV (1.40), AXIS Bank (1.23), Infibeam Incorporation (1.23) and State Bank of India (1.22).

Among most active underlying, State Bank of India witnessed an addition of 4.42 million units of Open Interest in the May month futures contract, followed by Ashok Leyland witnessing a contraction of 0.86 million units of Open Interest in the May month contract, Bajaj Finance witnessed a contraction of 0.01 million units of Open Interest in the May month contract, DLF witnessed a contraction of 0.11 million units of Open Interest in the May month contract and Tata Motors witnessed a contraction of 0.92 million units of Open Interest in the May month future contract.