Nifty pares gains in last hour to end slightly higher

Key Indian equity benchmark Nifty on Monday ended slightly above the neutral line, just shy of 10,800 mark. The index made a flat-to-positive start and soon extended its gains for most part of the day, as the domestic sentiments got boost with the Confederation of Indian Industry’s latest report stating that industry is expecting the gross domestic product (GDP) to grow by close to 8% over the next two years, with a solid foundation of strong reforms process and fiscal prudence. Adding some optimism, Commerce Minister Suresh Prabhu said that the country’s GDP growth may surpass 8% in the next two years and in 7-8 years the economy’s size will double to $5 trillion. The Minister also said that in current financial year the growth will be better than the preceding fiscal. Domestic sentiments also remained upbeat with Union Agriculture Minister Radha Mohan Singh’s statement that the Union government has been working consistently from the past 4 years, in order to double the income of farmers and animal rearers. Further, traders got some support with a report highlighting that Central Board of Indirect Taxes and Customs (CBIC) cleared over Rs 7000 crore worth Goods and Services Tax (GST) refunds of exporters during the initial phase of the special refund drive undertaken by the authorities. However, the Nifty trimmed most of its gains in the last hour of the trade to end marginally higher, on account of heavy selling on the street. Traders got cautious with Former finance minister P Chidambaram’s statement that state of the economy was bad in the country due to the wrong policies of the NDA government and tyres of three (Exports, Private Investment, Private Consumption) of the four wheels on which the economy rides were punctured. Some concerns also came with a private report that India's retail inflation likely jumped further in May to a four-month high, primarily driven by a surge in energy prices, suggesting more policy tightening from the central bank is coming.

All the sectoral indices ended in green on the NSE, except Metal and Realty. The top gainers from the F&O segment were PC Jeweller, Balrampur Chini Mills and TV18 Broadcas. On the other hand, the top losers were Container Corporation of India, National Aluminium Company and Castrol India. In the index option segment, maximum OI continues to be seen in the 10,800-11,000 calls and 10,400-10,600 puts indicating this is the trading range expectation.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 3.83% and reached 13.18. The 50-share Nifty was up by 19.30 points or 0.18% to settle at 10,786.95.

Nifty June 2018 futures closed at 10785.80 on Monday, at a discount of 1.15 points over spot closing of 10786.95, while Nifty June 2018 futures ended at 10797.60, at a premium of 10.65 points over spot closing.  Nifty July futures saw an addition of 0.88 million (mn) units, taking the total outstanding open interest (OI) to 23.24 mn units. The near month derivatives contract will expire on June 28, 2018.

From the most active contracts, Sun Pharmaceutical June 2018 futures traded at a premium of 1.50 points at 535.55 compared with spot closing of 534.05. The numbers of contracts traded were 26,971.

Tata Motors June 2018 futures traded at a premium of 0.70 points at 310.05 compared with spot closing of 309.35. The numbers of contracts traded were 18,881.

State Bank of India June 2018 futures traded at a premium of 0.50 points at 274.10 compared with spot closing of 273.60. The numbers of contracts traded were 18,583.

Tata Steel June 2018 futures traded at a premium of 4.00 points at 590.95 compared with spot closing of 586.95. The numbers of contracts traded were 14,307.

Punjab National Bank June 2018 futures traded at a premium of 0.30 points at 91.70 compared with spot closing of 91.40. The numbers of contracts traded were 14,178.

Among Nifty calls, 10900 SP from the June month expiry was the most active call with an addition of 0.17 million open interests. Among Nifty puts, 10700 SP from the June month expiry was the most active put with an addition of 0.64 million open interests. The maximum OI outstanding for Calls was at 11000 SP (3.93mn) and that for Puts was at 10600 SP (4.95mn). The respective Support and Resistance levels of Nifty are: Resistance 10,832.65 ---- Pivot Point 10,804.85 --- Support --- 10759.15.

The Nifty Put Call Ratio (PCR) finally stood at 1.22 for June month contract. The top five scrips with highest PCR on OI were Ramco Cements (2.25), Dish TV (2.24), Cummins India (1.61), Manappuram Finance (1.41) and Grasim Industries (1.20).

Among most active underlying, Reliance Industries witnessed an addition of 0.24 million units of Open Interest in the June month futures contract, followed by State Bank of India witnessing a contraction of 0.33 million units of Open Interest in the June month contract, Sun Pharmaceutical witnessed a contraction of 2.32 million units of Open Interest in the June month contract, Maruti Suzuki witnessed a contraction of 0.0001 million units of Open Interest in the June month contract and Bajaj Finance witnessed an addition of 0.01 million units of Open Interest in the June month future contract.