Nifty ends near day’s high

The local benchmark -- Nifty-- ended the session near its intraday high point on Monday, reclaiming its crucial psychological level of 11,050. After a cautious opening, the market remained higher, aided by a report that the GST Council on July 21 reduced the tax rates on several items, including an array of white goods and consumer articles, and extended big compliance relief to taxpayers with new simplified returns and quarterly returns filing facility for 93% of the businesses registered for the tax. The street also cheered retirement fund body EPFO’s payroll data stating that as many as 4,474,859 jobs created during September 2017 to May this year. Adding some optimism, industry chamber CII said that the decision of the GST Council to cut rates and simplification of return filing process will increase the compliance rate and add to revenue buoyancy.

Further, in the second half of the session, the Nifty gained the traction to reach at its intraday peak, on the account of heavy buying in recent losers. Traders took encouragement with a private report stating that the 10 major economies of Asia, including India, are expected to see robust growth and amount to over $28 trillion in real GDP terms on aggregate, more than the US by 2030. Some support also came with the steel ministry’s statement that India’s steel exports to America are very low and hence the import tariff hike by the US will not pose any immediate threat to the domestic industry.

All the sectoral indices ended in green on the NSE except IT. The top gainers from the F&O segment were UPL, PC Jeweller and L&T Finance Holdings. On the other hand, the top losers were South Indian Bank, Hero MotoCorp and Bajaj Auto. In the index option segment, maximum OI continues to be seen in the 10,800-11,200 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 4.32% and reached 12.95. The 50-share Nifty was up by 74.55 points or 0.68% to settle at 11,084.75.

Nifty July 2018 futures closed at 11099.40 on Monday, at a premium of 14.65 points over spot closing of 11084.75, while Nifty August 2018 futures ended at 11119.45, at a premium of 34.70 points over spot closing. Nifty July futures saw a contraction of 1.62 million (mn) units, taking the total outstanding open interest (OI) to 22.48 mn units. The near month derivatives contract will expire on July 26, 2018.

From the most active contracts, UPL July 2018 futures traded at a discount of 2.20 points at 632.70 compared with spot closing of 634.90. The numbers of contracts traded were 34,813.

Tata Steel July 2018 futures traded at a premium of 1.30 points at 518.00 compared with spot closing of 516.70. The numbers of contracts traded were 27,613.

Bajaj Finance July 2018 futures traded at a premium of 10.80 points at 2762.45 compared with spot closing of 2751.65. The numbers of contracts traded were 23,407.

PC Jeweller July 2018 futures traded at a premium of 0.35 points at 93.85 compared with spot closing of 93.50. The numbers of contracts traded were 21,927.

ICICI Bank July 2018 futures traded at a premium of 0.60 points at 275.60 compared with spot closing of 275.00. The numbers of contracts traded were 20,712.

Among Nifty calls, 11100 SP from the July month expiry was the most active call with a contraction of 3.70 million open interests. Among Nifty puts, 11000 SP from the July month expiry was the most active put with an addition of 1.01 million open interests. The maximum OI outstanding for Calls was at 11,100 SP (3.41 mn) and that for Puts was at 11,000 SP (5.76 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,115.12 ---- Pivot Point 11,063.03 --- Support --- 11,032.67.

The Nifty Put Call Ratio (PCR) finally stood at 1.67 for July month contract. The top five scrips with highest PCR on OI were Repco Home Finance (2.52), Adani Power (2.31), Adani Enterprises (1.50) Just Dail (1.20) and Bajaj Finance (1.16).

Among most active underlying, Bajaj Finance witnessed a contraction of 0.63 million units of Open Interest in the July month futures contract, followed by Reliance Industries witnessing a contraction of 5.06 million units of Open Interest in the July month contract, HDFC Bank witnessed a contraction of 1.37 million units of Open Interest in the July month contract, Maruti Suzuki India witnessed a contraction of 0.06 million units of Open Interest in the July month contract and UPL witnessed a contraction of 1.47 million units of Open Interest in the July month future contract.