Indian equity benchmark Nifty ended Tuesday’s session on optimistic note, amid firm cues from European markets. The index started on a cautious note but soon rallied up to trade firm throughout the session, aided by finance minister Piyush Goyal’s statement that India is likely to improve upon the fiscal deficit target this fiscal year thanks to rising goods and services tax (GST) collections. The domestic sentiments also remained upbeat with Commerce Minister Suresh Prabhu’s statement that early data indicate that exports have registered a good performance in June despite volatility in global markets. Some support also came with a private report stating that consumer sentiment regarding personal finances, business and buying conditions remained stable in June despite a rate hike by RBI, as consumers said they are benefitting from the revival in growth.
However, gains were limited, as anxiety remained among the investors with a report that Leading stock exchange BSE will delist as many as 222 companies from tomorrow as trading in their shares has remained suspended for over six months. Negative data of core sector growth also weighed on the investors’ sentiments. The growth of eight core infrastructure industries slowed to ten-month low of 3.6% in May 2018, as compared to 4.7% in April 2018, on account of a decline in production of crude oil and natural gas. Meanwhile, Niti Aayog CEO Amitabh Kant has said the economic development of South Asia has been ‘severely hampered’ due to lack of intra-regional trade and stressed on the need for a greater push to investments, travel and tourism in the region.
Traders were seen piling up positions in Pharma, Auto and IT stocks, while selling was witnessed in PSU Bank, Metal and Financial services. The top gainers from the F&O segment were Just Dial, Tata Global Beverages and United Breweries. On the other hand, the top losers were IDBI Bank, Vedanta and CG Power and Industrial Solutions. 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 2.77% and reached 13.00. The 50-share Nifty was up by 42.60 points or 0.40% to settle at 10,699.90.
Nifty July 2018 futures closed at 10723.95 on Tuesday, at a premium of 24.05 points over spot closing of 10699.90, while Nifty August 2018 futures ended at 10739.65, at a premium of 39.75 points over spot closing. Nifty July futures saw an addition of 0.51 million (mn) units, taking the total outstanding open interest (OI) to 20.32 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 7.85 points at 559.70 compared with spot closing of 567.55. The numbers of contracts traded were 24,959.
Vedanta July 2018 futures traded at a premium of 1.10 points at 232.10 compared with spot closing of 231.00. The numbers of contracts traded were 17,782.
Tata Motors July 2018 futures traded at a premium of 0.90 points at 271.10 compared with spot closing of 270.20. The numbers of contracts traded were 14,318.
Reliance Industries July 2018 futures traded at a premium of 4.95 points at 977.15 compared with spot closing of 972.20. The numbers of contracts traded were 13,567.
State Bank of India July 2018 futures traded at a premium of 1.05 points at 259.05 compared with spot closing of 258.00. The numbers of contracts traded were 13,263.
Among Nifty calls, 10800 SP from the July month expiry was the most active call with a contraction of 0.21 million open interests. Among Nifty puts, 10600 SP from the July month expiry was the most active put with an addition of 0.40 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (3.63 mn) and that for Puts was at 10,600 SP (5.16mn). The respective Support and Resistance levels of Nifty are: Resistance 10,732.05 ---- Pivot Point 10,681.15 --- Support --- 10649.00.
The Nifty Put Call Ratio (PCR) finally stood at 1.21 for July month contract. The top five scrips with highest PCR on OI were Adani Power (1.80), Oil India (1.55), DHFL (1.09), ICICI Prudential Life Insurance (1.07) and Federal Bank (1.06).
Among most active underlying, Reliance Industries witnessed an addition of 0.18 million units of Open Interest in the July month futures contract, followed by Tata Steel witnessing an addition of 0.99 million units of Open Interest in the July month contract, Maruti Suzuki witnessed a contraction of 0.02 million units of Open Interest in the July month contract, Tata Consultancy Services witnessed an addition of 0.18 million units of Open Interest in the July month contract and State Bank of India witnessed a contraction of 0.77 million units of Open Interest in the July month future contract.
