Nifty ends with minor gains

The local equity benchmark Nifty ended higher on Wednesday with marginal gains, on the back of weak cues from other Asian markets. The index made a firm opening and traded in green terrain throughout the day, aided by positive industrial production data. Index of Industrial Production (IIP) grew at a faster rate of 4.9% in the month of April 2018 as against a growth rate of 3.2% in the same month of 2017. The factory output once again came back to growth trajectory, mainly on the back of pick-up in manufacturing as it contributes more than three-fourths to the index. In March of this year, industrial production had grown at 4.4%. Traders were optimistic with a report that the Central Board of Indirect Taxes and Customs (CBIC) has extended the refund fortnight for fast track clearance of pending dues to exporters by two days till June 16. Further, some support also came with markets regulator Sebi’s proposal to allow direct listing of Indian companies on overseas bourses and of foreign firms on Indian exchanges, while setting up an expert panel to look into the details. Currently, Indian companies can list their shares through depository receipts abroad, while foreign companies need to go through the Indian Depository Receipt route for listing of equities. However, in the last leg of the trade, the Nifty pared most of its gains to end with minor gains, due to heavy selling in the recent gainers coupled with disappointing inflation data. India’s retail inflation edged higher to 4.87% in the month of May 2018, as compared to 4.58% in April 2018, continuing its rising trend for the second straight month. Domestic sentiments also got hit, as industry body CII warned that rate hike by the Reserve Bank will increase the cost of doing business and impact capital expenditure by India Inc. Investors remained on sidelines ahead of the wholesale price index (WPI) inflation data that will be announced on June 14, 2018.

Traders were seen piling up positions in Banking, IT and Pharma stocks, while selling was witnessed in Metal, Media and FMCG sector stocks. The top gainers from the F&O segment were PC Jeweller, Kaveri Seed Company and Page Industries.On the other hand, the top losers were Idea Cellular, NCC and Glenmark Pharmaceuticals. In the index option segment, maximum OI continues to be seen in the 10,900-11,000 calls and 10,600-10,700 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 0.75% and reached 12.63. The 50-share Nifty was up by 13.85 points or 0.13% to settle at 10,856.70.

Nifty June 2018 futures closed at 10844.85 on Wednesday, at a discount of 11.85 points over spot closing of 10856.70, while Nifty July 2018 futures ended at 10856.75, at a premium of 0.05 points over spot closing.  Nifty June futures saw an addition of 0.82 million (mn) units, taking the total outstanding open interest (OI) to 24.55 mn units. The near month derivatives contract will expire on June 28, 2018.

From the most active contracts, Sun Pharmaceutical Industries June 2018 futures traded at a discount of 0.05 points at 546.05 compared with spot closing of 546.10. The numbers of contracts traded were 31,381.

State Bank of India June 2018 futures traded at a discount of 0.05 points at 287.25 compared with spot closing of 287.30. The numbers of contracts traded were 27,336.

Dr. Reddy's Laboratories June 2018 futures traded at a premium of 4.10 points at 2258.15 compared with spot closing of 2254.05. The numbers of contracts traded were 23,210.

Tata Steel June 2018 futures traded at a premium of 2.30 points at 569.90 compared with spot closing of 567.60. The numbers of contracts traded were 21,148.

Indiabulls Housing Finance June 2018 futures traded at a premium of 4.60 points at 1214.70 compared with spot closing of 1210.10. The numbers of contracts traded were 20,955.  

Among Nifty calls, 10900 SP from the June month expiry was the most active call with a contraction of 0.01 million open interests. Among Nifty puts, 10800 SP from the June month expiry was the most active put with an addition of 0.81 million open interests. The maximum OI outstanding for Calls was at 11000 SP (3.85 mn) and that for Puts was at 10700 SP (5.16 mn). The respective Support and Resistance levels of Nifty are: Resistance 10885.75---- Pivot Point 10864.20--- Support --- 10835.15.

The Nifty Put Call Ratio (PCR) finally stood at 1.33 for June month contract. The top five scrips with highest PCR on OI were Cummins India (1.78), Just Dial (1.50), Manappuram Finance (1.32), Ramco Cements (1.29) and SBI (1.26).

Among most active underlying, Tata Consultancy Services witnessed a contraction of 1.06 million units of Open Interest in the June month futures contract, followed by State Bank of India witnessing an addition of 4.73 million units of Open Interest in the June month contract, Reliance Industries witnessed a contraction of 0.35 million units of Open Interest in the June month contract, Sun Pharmaceutical Industries witnessed a contraction of 2.49 million units of Open Interest in the June month contract and Tata Steel witnessed an addition of 0.75 million units of Open Interest in the June month future contract.