Nifty ends higher; settles above 10,650 mark

Key Indian equity benchmark Nifty ended higher on Wednesday after three days of drubbing. The index made a cautious start but soon gained momentum, amid the private report stating that the government has effected a major overhaul of its credit guarantee scheme to make adequate loans available to micro and small enterprises easily by more than tripling its corpus to Rs 8,000 crore and allowing non-banking financial companies (NBFCs), along with banks, to avail of official guarantees to extend credit to such units. Sentiments also got boost with World Bank’s latest report that India is projected to regain its position as the World's fastest growing major economy advancing 7.3% this fiscal year and 7.5% in the next two ‘as factors holding back growth in India fade’. However, in late afternoon deals, the index trimmed some of its gains, after the RBI for the first time in four-and-half-years raised key interest rate by 25 basis points to 6.25% on inflation concerns arising from surge in international oil prices. But, the market recovered in the last leg of the trade and closed near intraday high point, supported by hefty buying by investors. Traders took some encouragement with Prime Minister Narendra Modi’s statement that the government is taking several steps to promote young entrepreneurs in the country, adding that startups are no longer confined to big cities.

All the sectoral indices ended in green on the NSE. The top gainers from the F&O segment were Reliance Communications, Allahabad Bank and IDFC Bank. On the other hand, the top losers were Balrampur Chini Mills, Dalmia Bharat and Infibeam Incorporation. In the index option segment, maximum OI continues to be seen in the 10,800-11,000 calls and 10,300-10,600 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 4.75% and reached 12.68. The 50-share Nifty was up by 91.50 points or 0.86% to settle at 10,684.65.

Nifty June 2018 futures closed at 10686.25 on Wednesday, at a premium of 1.60 points over spot closing of 10684.65, while Nifty June 2018 futures ended at 10701.00, at a premium of 16.35 points over spot closing. Nifty July futures saw an addition of 0.17 million (mn) units, taking the total outstanding open interest (OI) to 20.64 mn units. The near month derivatives contract will expire on June 28, 2018.

From the most active contracts, Tata Motors June 2018 futures traded at a premium of 1.35 points at 296.80 compared with spot closing of 295.45. The numbers of contracts traded were 25,381.

State Bank of India June 2018 futures traded at a premium of 0.55 points at 270.80 compared with spot closing of 270.25. The numbers of contracts traded were 20,459.

Biocon June 2018 futures traded at a premium of 1.35 points at 609.35 compared with spot closing of 608.00. The numbers of contracts traded were 16,209.

Vedanta June 2018 futures traded at a premium of 1.35 points at 247.55 compared with spot closing of 246.20. The numbers of contracts traded were 16,010.

Bajaj Finance June 2018 futures traded at a discount of 1.35 points at 2166.90 compared with spot closing of 2168.25. The numbers of contracts traded were 15,420.

Among Nifty calls, 10700 SP from the June month expiry was the most active call with a contraction of 0.21 million open interests. Among Nifty puts, 10600 SP from the June month expiry was the most active put with an addition of 0.61 million open interests. The maximum OI outstanding for Calls was at 11000 SP (4.17mn) and that for Puts was at 10600 SP (4.04mn). The respective Support and Resistance levels of Nifty are: Resistance 10,726.17 ---- Pivot Point 10,656.83 --- Support --- 10615.32.

The Nifty Put Call Ratio (PCR) finally stood at 1.03 for June month contract. The top five scrips with highest PCR on OI were Dish TV (2.41), Ajanta Pharma (2.11), Cummins India (1.96), Ramco Cements (1.67) and Manappuram Finance (1.56).

Among most active underlying, State Bank of India witnessed an addition of 2.52 million units of Open Interest in the June month futures contract, followed by HDFC Bank witnessing a contraction of 0.06 million units of Open Interest in the June month contract, Bajaj Finance witnessed an addition of 0.27 million units of Open Interest in the June month contract, Tata Motors witnessed a contraction of 2.81 million units of Open Interest in the June month contract and Reliance Industries witnessed an addition of 0.07 million units of Open Interest in the June month future contract.