Nifty ends at fresh closing high, surpasses 11,300 mark

Surpassing a crucial psychological level of 11,300, Indian equity benchmark Nifty ended Monday’s session at fresh closing high with the gains of over 40 points. After a firm start, the index pared gains and slipped into red zone, ahead of the Reserve Bank of India (RBI) policy meeting. Domestic sentiments got cautious with the rating agency Moody’s latest report stating that the recent Goods and Services Tax (GST) rate cuts on 88 items will weigh on the government’s revenue collection and is ‘credit negative’ as it will put pressure on efforts of fiscal consolidation. The market participants took note of Niti Aayog CEO Amitabh Kant’s statement that the country needs to improve its human development index (HDI) to achieve a growth of around 10%.

However, Nifty recovered from its losses and came back into green terrain. In second half of the session, the market added gains to reach its fresh record high, aided by Union Minister of State for Finance Shiv Pratap Shukla’s statement that the government is making concerted efforts to double the farmers' income by 2022. Adding some optimism, foreign investors have put in over Rs 1,800 crore in the Indian equity markets so far in July after pulling out massive funds in the preceding month. The latest inflow comes after such investors had taken out more than Rs 20,000 crore from the stock market during April-June. Meanwhile, the government removed restrictions for imports of urea for industrial, non-agriculture and technical grade.

All the sectoral indices ended in green on the NSE except IT. The top gainers from the F&O segment were Adani Power, Bank of Baroda and BEML. On the other hand, the top losers were Max Financial Services, Reliance Infrastructure and Dalmia Bharat. In the index option segment, maximum OI continues to be seen in the 11,000 -11,600 calls and 10,700 -11,100 puts indicating this is the trading range expectation.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 2.23% and reached 12.58. The 50-share Nifty was up by 41.20 points or 0.37% to settle at 11,319.55.

Nifty August 2018 futures closed at 11338.50 on Monday, at a premium of 18.95 points over spot closing of 11319.55, while Nifty September 2018 futures ended at 11359.20, at a premium of 39.65 points over spot closing. Nifty August futures saw an addition of 1.00 million (mn) units, taking the total outstanding open interest (OI) to 23.79 mn units. The near month derivatives contract will expire on August 30, 2018.

From the most active contracts, ICICI Bank August 2018 futures traded at a discount of 0.65 points at 306.85 compared with spot closing of 307.50. The numbers of contracts traded were 42,715.

Reliance Industries August 2018 futures traded at a premium of 2.30 points at 1154.30 compared with spot closing of 1152.00. The numbers of contracts traded were 31,391.

Bank of Baroda August 2018 futures traded at a premium of 0.30 points at 152.45 compared with spot closing of 152.15. The numbers of contracts traded were 29,756.

State Bank of India August 2018 futures traded at a premium of 0.90 points at 297.40 compared with spot closing of 296.50. The numbers of contracts traded were 29,743.

Axis Bank August 2018 futures traded at a premium of 0.70 points at 569.70 compared with spot closing of 569.00. The numbers of contracts traded were 23,259.

Among Nifty calls, 11500 SP from the August month expiry was the most active call with an addition of 0.04 million open interests. Among Nifty puts, 11200 SP from the August month expiry was the most active put with an addition of 0.32 million open interests. The maximum OI outstanding for Calls was at 11,400 SP (2.04mn) and that for Puts was at 11,000 SP (4.14 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,344.62 ---- Pivot Point 11,303.03 --- Support --- 11,277.97.

The Nifty Put Call Ratio (PCR) finally stood at 1.41 for August month contract. The top five scrips with highest PCR on OI were Godfrey Phillips India (3.20), Dish tv (1.45), Hindustan Construction Company (1.41), Oil India (1.40) and ICICI Bank (1.36).

Among most active underlying, Reliance Industries India witnessed an addition of 0.14 million units of Open Interest in the August month futures contract, followed by ICICI Bank witnessing an addition of 5.06 million units of Open Interest in the August month contract, State Bank of India witnessed a contraction of 1.21 million units of Open Interest in the August month contract, Axis Bank witnessed a contraction of 1.26 million units of Open Interest in the August month contract and  Bank of Baroda witnessed an addition of 0.31million units of Open Interest in the August month future contract.