Indian equity benchmark Nifty ended higher with a gain of more than one percent on last trading day of the week. The index made a positive start and remained firm throughout the session, supported by a private report stating that the second quarter of calendar year 2018 saw the biggest ever private equity (PE) investments in India. The PE firms have invested a record $8.2 billion during the quarter ended June 2018, an increase of 60% compared with $5.1 billion in the same period last year. Traders remained optimistic with the International Monetary Fund (IMF) suggesting steps to sustain the high growth rate which India has achieved. It said that the country should carry out banking sector reforms; continue with fiscal consolidation, simplify and streamline GST; and renew impetus on reforms. Adding some comfort, Economic Affairs Secretary Subhash Chandra Garg said that India has adequate ‘firepower’ of foreign exchange reserves to deal with the current volatility in the rupee.
Further, the Nifty continued northward rally in the second half, following positive trend in global markets. The domestic sentiments further strengthened with Secretary of the Department of Expenditure under Finance Ministry Ajay Narayan Jha’s statement that the fiscal deficit, which is the difference between total revenue and expenditure, for the current financial year (FY19), will be maintained at 3.3% of the gross domestic product (GDP) and the fiscal consolidation of the country is as per the ‘commitment’. Investors overlooked the World Bank’s latest report stating that the India may see 2.8% fall in GDP by 2050, amid rising temperatures and changing monsoon rainfall patterns from climate change. Meanwhile, the fiscal deficit for the first two months of the current fiscal FY19 stood at 55.3% or Rs 3.455 lakh crore of the budgeted target of Rs 6.243 lakh crore.
All the sectoral indices ended in green on the NSE. The top gainers from the F&O segment were Hindustan Construction Company, IDBI Bank and Petronet LNG. On the other hand, the top losers were Balrampur Chini Mills, Jain Irrigation Systems and Dr Reddy's Laboratories. In the index option segment, maximum OI continues to be seen in the 10,800-11,000 calls and 10,500-10,600 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 7.24% and reached 12.93. The 50-share Nifty was up by 125.20 points or 1.18% to settle at 10,714.30.
Nifty July 2018 futures closed at 10694.80 on Friday, at a discount of 19.50 points over spot closing of 10714.30, while Nifty August 2018 futures ended at 10711.90, at a discount of 2.40 points over spot closing. Nifty July futures saw an addition of 0.99 million (mn) units, taking the total outstanding open interest (OI) to 19.78 mn units. The near month derivatives contract will expire on July 26, 2018.
From the most active contracts, Tata Steel July 2018 futures traded at a discount of 7.45 points at 559.55 compared with spot closing of 567.00. The numbers of contracts traded were 23,297.
ICICI Bank July 2018 futures traded at a premium of 0.10 points at 274.80 compared with spot closing of 274.70. The numbers of contracts traded were 18,414.
Tech Mahindra July 2018 futures traded at a discount of 9.50 points at 643.75 compared with spot closing of 653.25. The numbers of contracts traded were 17,633.
Tata Motors July 2018 futures traded at a premium of 1.40 points at 270.30 compared with spot closing of 268.90. The numbers of contracts traded were 16,567.
Reliance Industries July 2018 futures traded at a premium of 1.60 points at 974.80 compared with spot closing of 973.20. The numbers of contracts traded were 16,015.
Among Nifty calls, 10700 SP from the July month expiry was the most active call with a contraction of 0.04 million open interests. Among Nifty puts, 10600 SP from the July month expiry was the most active put with an addition of 1.05 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (3.32 mn) and that for Puts was at 10,600 SP (4.56 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,754.12 ---- Pivot Point 10,683.23 --- Support --- 10643.42.
The Nifty Put Call Ratio (PCR) finally stood at 1.14 for July month contract. The top five scrips with highest PCR on OI were Indiabulls Housing Finance (1.56), Adani Power (1.46), Dewan Housing Finance Corporation (1.28), Granules India (1.28) and Oil India (1.25).
Among most active underlying, Reliance Industries witnessed a contraction of 0.19 million units of Open Interest in the July month futures contract, followed by ICICI Bank witnessing an addition of 3.08 million units of Open Interest in the July month contract, Tata Steel witnessed an addition of 0.53 million units of Open Interest in the July month contract, HDFC Bank witnessed a contraction of 0.43 million units of Open Interest in the July month contract and Tech Mahindra witnessed an addition of 0.97 million units of Open Interest in the July month future contract.
