Nifty snaps 2-days losing streak; reclaims 11k mark

Snapping two days losing streak, Indian equity benchmark Nifty ended higher on last trading day of the week, with the gains of around half a percent. The index made a cautious start but soon gained ground to trade bullish for rest of the session, aided by Federation of Indian Chambers of Commerce and Industry’s(FICCI) statement that Indian economic growth story remains intact with the Gross Domestic Product (GDP) expected to grow around 7.5% in the current financial year, despite short-term challenges. Adding some optimism, India’s top envoy to the UN Syed Akbaruddin said that India is pushing ahead on its national efforts to meet Sustainable Devolvement Goals by undertaking one of the highest rates of renewable energy expansion and building 11 million homes under the world’s largest affordable housing programme.

Domestic sentiments also got boost with S&P Global Ratings’ latest report stating that economic data from India continues to be positive overall and the purchasing manager indices are above 50 and trending upward, suggesting a broad-based and strengthening upturn. Some support also came with a report that the proposed new industrial policy, to be released soon, would focus on areas such as promotion of digital ports and use of big data to boost India's exports and manufacturing sector. The market participants paid no heed towards ICRA’s report stating that India’s current account deficit (CAD) is set to widen and the first quarter print may come in at $16-17 billion or 2.5% of Gross Domestic Product (GDP) and added that for the full year the gap may scale a six-year high of $67-72 billion.

All the sectoral indices ended in green on the NSE except Auto, Media and Metal. The top gainers from the F&O segment were PC Jeweller, Adani Power and Bajaj Finance. On the other hand, the top losers were Bajaj Auto, SREI Infrastructure Finance and Indian Bank. In the index option segment, maximum OI continues to be seen in the 10,800-11,100 calls and 10,700-11,000 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 1.10% and reached 13.44. The 50-share Nifty was up by 53.10 points or 0.48% to settle at 11,010.20.

Nifty July 2018 futures closed at 11024.85 on Friday, at a premium of 14.65 points over spot closing of 11010.20, while Nifty August 2018 futures ended at 11041.15, at a premium of 30.95 points over spot closing. Nifty July futures saw an addition of 0.21 million (mn) units, taking the total outstanding open interest (OI) to 24.10 mn units. The near month derivatives contract will expire on July 26, 2018.

From the most active contracts, Bajaj Auto July 2018 futures traded at a premium of 22.40 points at 2844.00 compared with spot closing of 2821.60. The numbers of contracts traded were 48,662.

Bajaj Finance July 2018 futures traded at a premium of 6.35 points at 2728.30 compared with spot closing of 2721.95. The numbers of contracts traded were 47,776.

Reliance Industries July 2018 futures traded at a premium of 3.00 points at 1130.65 compared with spot closing of 1127.65. The numbers of contracts traded were 29,022.

Ceat July 2018 futures traded at a discount of 0.35 points at 1359.55 compared with spot closing of 1359.90. The numbers of contracts traded were 22,894.

PC Jeweller July 2018 futures traded at a discount of 2.55 points at 82.15 compared with spot closing of 84.70. The numbers of contracts traded were 21,152.

Among Nifty calls, 11000 SP from the July month expiry was the most active call with a contraction of 0.48 million open interests. Among Nifty puts, 10900 SP from the July month expiry was the most active put with an addition of 0.63 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (3.79 mn) and that for Puts was at 10,800 SP (4.77 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,044.90 ---- Pivot Point 10,995.55 --- Support --- 10,960.85.

The Nifty Put Call Ratio (PCR) finally stood at 1.50 for July month contract. The top five scrips with highest PCR on OI were Adani Power (2.11), Adani Enterprises (1.54), Repco Home Finance (1.42) Bajaj Finance (1.38) and Reliance Industries (1.25).

Among most active underlying, Bajaj Finance witnessed an addition of 0.23 million units of Open Interest in the July month futures contract, followed by Reliance Industries witnessing a contraction of 3.14 million units of Open Interest in the July month contract, Bajaj Auto witnessed an addition of 0.09 million units of Open Interest in the July month contract, Infosys witnessed a contraction of 1.30 million units of Open Interest in the July month contract and HDFC Bank witnessed a contraction of 0.43 million units of Open Interest in the July month future contract.