Nifty ends 2-day losing run; settles above 10,750 mark

Indian equity benchmark Nifty ended the Wednesday’s session near fresh intraday high point, reclaiming its crucial psychological level of 10,750, tracking firm global cues. After a firm start, the index remained bullish throughout the session, as street remained upbeat with Economic Affairs Secretary Subhash Chandra Garg’s statement that it is a plausible aspiration for India and the country has also potential to become a $10 trillion economy by 2030. He added that this target is likely to be achieved with the help of a sustained average growth of 8% coupled with an assumed devaluation of Indian rupee vis-a-vis US dollar at Re one per year. Investors took note of Moody’s latest report which highlighted that non-financial corporates in the country may show modest improvement in their leverage levels in the current financial year, supported by higher revenue and earnings growth. Traders also got some support after Prime Minister Narendra Modi said his government has doubled the Budget for agriculture to Rs 2.12 trillion (Rs 2.12 lakh crore) to achieve its objective of doubling farm income by 2022. Further, domestic sentiments remained positive with Niti Aayog CEO Amitabh Kant’s statement that the Centre has saved Rs 90,000 crore by digitally transferring money to beneficiaries of 440 government schemes. Some support also came with another private report stating that despite adverse impact on GST implementation, India saw a 20% increase in both the number of dollar millionaires and their wealth in 2017 to emerge as the fastest growing market for high net population.

All the sectoral indices ended in green on the NSE, except FMCG, IT and PSU Bank. The top gainers from the F&O segment were Reliance Communications, Reliance Capital and CG Power and Industrial Solutions. On the other hand, the top losers were InterGlobe Aviation, National Aluminium Company and UPL. In the index option segment, maximum OI continues to be seen in the 10,800-11,000 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 5.79% and reached 12.17. The 50-share Nifty was up by 61.60 points or 0.58% to settle at 10,772.05.

Nifty June 2018 futures closed at 10790.65 on Wednesday, at a premium of 18.60 points over spot closing of 10772.05, while Nifty July 2018 futures ended at 10796.25, at a premium of 24.20 points over spot closing. Nifty June futures saw a contraction of 0.17 million (mn) units, taking the total outstanding open interest (OI) to 24.57 mn units. The near month derivatives contract will expire on June 28, 2018.

From the most active contracts, Reliance Industries June 2018 futures traded at a discount of 2.65 points at 1016.55 compared with spot closing of 1019.20. The numbers of contracts traded were 18,961.

Tata Steel June 2018 futures traded at a discount of 0.40 points at 565.10 compared with spot closing of 565.50. The numbers of contracts traded were 16,695.

Sun Pharmaceutical June 2018 futures traded at a premium of 1.05 points at 565.50 compared with spot closing of 564.45. The numbers of contracts traded were 15,417.

Vedanta June 2018 futures traded at a premium of 1.25 points at 229.40 compared with spot closing of 228.15. The numbers of contracts traded were 14,598.

ICICI Bank June 2018 futures traded at a premium of 0.70 points at 294.30 compared with spot closing of 293.60. The numbers of contracts traded were 14,183.

Among Nifty calls, 10800 SP from the June month expiry was the most active call with an addition of 0.75 million open interests. Among Nifty puts, 10800 SP from the June month expiry was the most active put with a contraction of 0.55 million open interests. The maximum OI outstanding for Calls was at 11000 SP (4.96 mn) and that for Puts was at 10700 SP (5.37 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,794.55 ---- Pivot Point 10,759.30 --- Support --- 10736.80.

The Nifty Put Call Ratio (PCR) finally stood at 1.25 for June month contract. The top five scrips with highest PCR on OI were Cummins India (1.32), Repco Home Finance (1.17), LIC Housing Finance (1.16), JustDial (1.11) and Andhra Bank (1.10).

Among most active underlying, Reliance Industries witnessed a contraction of 0.56 million units of Open Interest in the June month futures contract, followed by HDFC Bank witnessing a contraction of 0.89 million units of Open Interest in the June month contract, State Bank of India witnessed a contraction of 5.55 million units of Open Interest in the June month contract, Tata Steel witnessed a contraction of 0.63 million units of Open Interest in the June month contract and ICICI Bank witnessed a contraction of 5.98 million units of Open Interest in the June month future contract.