Indian equity benchmark Nifty ended last trading day of the week on positive note, with gains of 0.75%. The index traded in red terrain for first half of the session, as domestic sentiments got cautious with union minister Suresh Prabhu’s statement that India was seeing real challenge at World Trade Organsation and in the global trading system itself. He stated that because, first time, countries are putting roadblocks and it is going to be real, real issue. Markets participants took note of the Vice President of India, Venkaiah Naidu’s statement that loan waivers are not a permanent solution and it would affect the agriculture sector and hurt the farmers in the long-term. He also underlined the need to increase the income and the purchasing power of the farmers.
However, in second half of the session, the Nifty erased all its losses to turn positive, tracking firm cues from European markets coupled with heavy buying. Traders got some support with a report stating that exports from special economic zones (SEZs) grew by 38% in May to Rs 29,236 crore. The major sectors contributing to the growth include biotech, chemicals, pharmaceuticals, computers, electronics, non-conventional energy, plastic, rubber, trading and services. Adding some optimism, World Bank’s data report showed that India continued to be the world’s top recipient of remittance from its diaspora, gathering $69 billion in 2017-nearly 1.5 times India’s defence budget for 2018-19-an increase of 9.5% from the previous year. Some support also came with private report stating that India fared well on its early warning indicators (EWI) index showing no signs of domestic or financial risks during the last three years. Meanwhile, Prime Minister Narendra Modi called for targeting double-digit GDP growth for breaking into the $5 trillion economy club and said India's share in world trade has to more than double to 3.4%.
All the sectoral indices ended in green on the NSE. The top gainers from the F&O segment were United Spirits, Sun Pharmaceutical Industries and Ujjivan Financial Services. On the other hand, the top losers were SRF, Hindustan Construction Company and Granules India. 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 3.41% and reached 12.02. The 50-share Nifty was up by 80.75 points or 0.75% to settle at 10,821.85.
Nifty June 2018 futures closed at 10833.95 on Friday, at a premium of 12.10 points over spot closing of 10821.85, while Nifty July 2018 futures ended at 10842.90, at a premium of 21.05 points over spot closing. Nifty June futures saw a contraction of 0.71 million (mn) units, taking the total outstanding open interest (OI) to 23.94 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 2.10 points at 1009.55 compared with spot closing of 1011.65. The numbers of contracts traded were 20,903.
Sun Pharma June 2018 futures traded at a discount of 1.05 points at 578.00 compared with spot closing of 579.05. The numbers of contracts traded were 20,743.
State Bank of India June 2018 futures traded at a premium of 0.90 points at 273.90 compared with spot closing of 273.00. The numbers of contracts traded were 18,265.
ICICI Bank June 2018 futures traded at a premium of 0.10 points at 301.55 compared with spot closing of 301.45. The numbers of contracts traded were 16,795.
Tata Steel June 2018 futures traded at a premium of 2.15 points at 563.15 compared with spot closing of 561.00. The numbers of contracts traded were 16,444.
Among Nifty calls, 10800 SP from the June month expiry was the most active call with a contraction of 1.28 million open interests. Among Nifty puts, 10800 SP from the June month expiry was the most active put with an addition of 0.86 million open interests. The maximum OI outstanding for Calls was at 11000 SP (4.75 mn) and that for Puts was at 10700 SP (5.70 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,869.08 ---- Pivot Point 10,789.77 --- Support --- 10742.53.
The Nifty Put Call Ratio (PCR) finally stood at 1.38 for June month contract. The top five scrips with highest PCR on OI were Repco Home (1.47), Cummins India (1.17), Manappuram Finance (1.08), Andhra Bank (1.08) and LIC Housing Finance (1.07).
Among most active underlying, Reliance Industries witnessed a contraction of 0.88 million units of Open Interest in the June month futures contract, followed by State Bank of India witnessing a contraction of 3.71 million units of Open Interest in the June month contract, ICICI Bank witnessed a contraction of 2.33 million units of Open Interest in the June month contract, HDFC Bank witnessed a contraction of 1.07 million units of Open Interest in the June month contract and Bajaj Finance witnessed a contraction of 500 units of Open Interest in the June month future contract.
