Nifty ends on strong note ahead of CPI, IIP data

Continuing its gaining streak for fifth straight session, an Indian key benchmark -- Nifty -- ended the session on a strong note on Thursday, on the back of sustained buying by the traders ahead of June retail inflation (CPI) and Index of Industrial Production (IIP) data due later in the day. The index started the session cheerfully and traded in fine fettle throughout the session, aided by the World Bank’s latest report stating that Indian economy has now become world’s sixth-biggest economy in 2017. The country pushed France to the seventh spot and ranked ahead of several European Union (EU) states. Optimism also spread on the street after the International Labour Organization (ILO), an arm of the United Nations, reported that if 40% of India’s electricity comes from renewables by 2030 (from 7.5% in February 2018), the country could add about 3 million new jobs. Investors’ sentiments remained positive, with a report that the estimated savings and gains since the inception of Aadhaar-based Direct Benefit Transfer (DBT) stood at over Rs 90,000 crore as on March 31 this year.

However, in the second half of the session, the Nifty trimmed some of their gains to come off its intraday high point, despite firm cues from European markets. Heavy selling in Realty and Auto stocks, weighted on the domestic sentiments. Some concerns came with a private report stating that global debt rose to a record $247 trillion in the first quarter, more than $29 trillion higher than the end of 2016. The market participants took note of Chief Economic Adviser (CEA) Arvind Subramanian’s statement that a three-tier structure under new tax regime is possible as revenues stabilise. He further noted that GST, India's biggest reform in indirect taxes still remains a work in progress and there is a need for further simplification of rates with fewer exemptions and simpler policies.

Traders were seen piling up positions in PUC Bank, Fin Service and Bank, while selling was witnessed in Realty, Media and Auto. The top gainers from the F&O segment were Balrampur Chini Mills, GMR Infrastructure and InterGlobe Aviation. On the other hand, the top losers were PC Jeweller, Adani Power and UPL. In the index option segment, maximum OI continues to be seen in the 10,800-11,100 calls and 10,400-10,800 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 1.58% and reached 12.57. The 50-share Nifty was up by 74.90 points or 0.68% to settle at 11,023.20.

Nifty July 2018 futures closed at 11016.25 on Thursday, at a discount of 6.95 points over spot closing of 11,023.20, while Nifty August 2018 futures ended at 11037.45, at a premium of 14.25 points over spot closing. Nifty July futures saw an addition of 0.83 million (mn) units, taking the total outstanding open interest (OI) to 25.17 mn units. The near month derivatives contract will expire on July 26, 2018.

From the most active contracts, Reliance July 2018 futures traded at a discount of 2.20 points at 1078.70 compared with spot closing of 1,080.90. The numbers of contracts traded were 52,069.

Infosys July 2018 futures traded at a premium of 4.75 points at 1299.75 compared with spot closing of 1,295.00. The numbers of contracts traded were 22,959.

Yes Bank July 2018 futures traded at a premium 2.35 points at 375.85 compared with spot closing of 373.50. The numbers of contracts traded were 21,500.

Tata Consultancy Services July 2018 futures traded at a premium of 2.45 points at 1975.45 compared with spot closing of 1,973.00. The numbers of contracts traded were 20,176.

Tata Steel July 2018 futures traded at a premium of 1.35 points at 557.30 compared with spot closing of 555.95. The numbers of contracts traded were 19,419.

Among Nifty calls, 11000 SP from the July month expiry was the most active call a contraction of 0.48 million open interests. Among Nifty puts, 11000 SP from the July month expiry was the most active put with an addition of 1.54 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (3.83 mn) and that for Puts was at 10,600 SP (5.16 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,067.78 ---- Pivot Point 11,033.72 --- Support --- 10,989.13.

The Nifty Put Call Ratio (PCR) finally stood at 1.55 for July month contract. The top five scrips with highest PCR on OI were Adani Enterprises (1.49), Adani Power (1.37), Just Dial (1.15), Reliance Industries (1.11) and Dewan Housing Finance Corporation (1.01).

Among most active underlying, Reliance Industries witnessed a contraction of 0.18 million units of Open Interest in the July month futures contract, followed by Tata Consultancy Services witnessing a contraction of 0.27 million units of Open Interest in the July month contract, Infosys witnessed an addition of 1.22 million units of Open Interest in the July month contract, Yes Bank witnessed a contraction of 2.09 million units of Open Interest in the July month contract and HDFC Bank witnessed a contraction of 0.04 million units of Open Interest in the July month future contract.