Nifty ends higher for second straight session

The local equity benchmark Nifty ended higher on Friday for the second straight session. After a positive start, the index continued its upward momentum, as the sentiments on the street remained buoyed with Care Ratings latest report titled ‘Indian Economy Prognosis: 2018-19’ forecasting that India’s gross domestic product (GDP) growth will accelerate to 7.5% in 2018-19, from 6.6% in the last fiscal. It added that the growth will be dependent on favorable monsoon, pick up in investment and increased private sector spending supported by continued government spending. Some comfort also came with NITI Aayog vice chairman Rajiv Kumar’s statement that states have the capacity and must reduce the duty on petrol, while the Centre should create fiscal space to deal with the impact of spurt in oil prices. The rising crude prices in the international market prompted state-owned oil companies to raise domestic prices for 11th day in a row. Petrol costs Rs 77.47 a litre in Delhi and diesel Rs 68.53 a litre. Further, in last leg of trade, the Nifty added gains and ended near intraday high point, as traders got some encouragement with a report stating that capital market regulator Securities and Exchange Board of India (SEBI) allowed ‘omnibus’ trades at the Gujarat International Finance Tec-city (GIFT City), India’s only international financial service centre (IFSC). An omnibus structure allows an investor trade through a broker or service provider with confidentiality. Meanwhile, Maharashtra Chief Minister Devendra Fadnavis has said that fuel prices will come down once the Centre builds a consensus to bring petrol and diesel under the Goods and Services Tax (GST).

All the sectoral indices ended in green on the NSE except IT. The top gainers from the F&O segment were Multi Commodity Exchange of India, IFCI and Just Dial. On the other hand, the top losers were Granules India, IDBI Bank and Cummins India.  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 3.80% and reached 12.64. The 50-share Nifty was up by 91.30 points or 0.87% to settle at 10,605.15.

Nifty May 2018 futures closed at 10602.40 on Friday, at a discount of 2.75 points over spot closing of 10605.15, while Nifty June 2018 futures ended at 10616.20, at a premium of 11.05 points over spot closing.  Nifty May futures saw a contraction of 0.45 million (mn) units, taking the total outstanding open interest (OI) to 22.14 mn units. The near month derivatives contract will expire on May 31, 2018.

From the most active contracts, Vedanta May 2018 futures traded at a premium of 0.10 points at 252.35 compared with spot closing of 252.25. The numbers of contracts traded were 26,977.

Tata Motors May 2018 futures traded at a premium of 0.50 points at 294.45 compared with spot closing of 293.95. The numbers of contracts traded were 19,984.

United Spirits May 2018 futures traded at a discount of 1.95 points at 3258.05 compared with spot closing of 3260.00. The numbers of contracts traded were 19,887.

Tata Steel May 2018 futures traded at a premium of 1.00 points at 568.50 compared with spot closing of 567.50. The numbers of contracts traded were 18,846.

State Bank of India May 2018 futures traded at a premium of 0.65 points at 267.65 compared with spot closing of 267.00. The numbers of contracts traded were 18,106.

Among Nifty calls, 10600 SP from the May month expiry was the most active call with a contraction of 0.45 million open interests. Among Nifty puts, 10500 SP from the May month expiry was the most active put with an addition of 1.21 million open interests. The maximum OI outstanding for Calls was at 10800 SP (5.29mn) and that for Puts was at 10500 SP (6.73mn). The respective Support and Resistance levels of Nifty are: Resistance 10,647.47 ---- Pivot Point 10,585.73 --- Support --- 10543.42.

The Nifty Put Call Ratio (PCR) finally stood at 1.28 for May month contract. The top five scrips with highest PCR on OI were Just Dial (1.75), State Bank of India (1.66), Dish TV (1.46), Asian Paint (1.33) and KPIT (1.29).

Among most active underlying, State Bank of India witnessed a contraction of 5.59 million units of Open Interest in the May month futures contract, followed by Tata Consultancy Services witnessing a contraction of 0.17 million units of Open Interest in the May month contract, Reliance Industries witnessed a contraction of 1.25 million units of Open Interest in the May month contract, Infosys witnessed a contraction of 2.55 million units of Open Interest in the May month contract and Tata Steel witnessed a contraction of 2.12 million units of Open Interest in the May month future contract.