Nifty settles at new closing high for fourth consecutive day

The local equity benchmark Nifty ended at new closing high for fourth consecutive day on Tuesday. The index traded in red for the most part of the session, as traders remained cautious ahead of the RBI’s monetary policy outcome. Anxiety also spread on the street with Reserve Bank of India’s (RBI) latest report revealing that Indian companies borrowed $2.71 billion from overseas markets in the month of June 2018 through external commercial borrowing (ECB) and rupee-denominated bonds (RDBs), 66.3% more than last year. Market-men continued to have a cautious approach towards Moody’s Investors Service’s report which stated that the GST Council’s decision to lower rates on several goods and also rationalise rates on some services will impact government’s fiscal consolidation effort.

However, in the last leg of trade, Nifty made a sharp recovery to enter in green terrain, aided by firm European markets. The street also got relief after the government sought Parliament's approval for additional gross additional expenditure of Rs 11,697.92 crore for the current fiscal. Some support also came with a report that corporate India’s business optimism index for the July-September quarter registered an 11.7% increase over last year. The Dun & Bradstreet Composite Business Optimism Index stood at 80.6 during the third quarter of 2018, an increase of 11.7% as compared to the corresponding period last year. Further, the market participants took note of a private report stating that GDP growth is likely to peak in April-June quarter and then moderate to 7.2% in the second half of 2018 from around 7.8% in first half.

Traders were seen piling up positions in Realty, IT and Pharma stocks, while selling was witnessed in Bank, Financial services and PSU Bank. The top gainers from the F&O segment were Bharat Electronics, Adani Power and Dabur. On the other hand, the top losers were Bank of India, Can Fin Homes and InterGlobe Aviation. In the index option segment, maximum OI continues to be seen in the 11,200-11,600 calls and 10,800 -11,200 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 0.83% and reached 12.48. The 50-share Nifty was up by 36.95 points or 0.33% to settle at 11,356.50.

Nifty August 2018 futures closed at 11371.60 on Tuesday, at a premium of 15.10 points over spot closing of 11356.50, while Nifty September 2018 futures ended at 11393.20, at a premium of 36.70 points over spot closing. Nifty August futures saw an addition of 1.25 million (mn) units, taking the total outstanding open interest (OI) to 25.04 mn units. The near month derivatives contract will expire on August 30, 2018.

From the most active contracts, Reliance Industries August 2018 futures traded at a premium of 4.40 points at 1188.55 compared with spot closing of 1184.15. The numbers of contracts traded were 38,103.

Axis Bank August 2018 futures traded at a premium of 4.05 points at 552.25 compared with spot closing of 548.20. The numbers of contracts traded were 36,826.

State Bank of India August 2018 futures traded at a premium of 1.20 points at 294.80 compared with spot closing of 293.60. The numbers of contracts traded were 28,854.

InterGlobe Aviation August 2018 futures traded at a discount of 12.20 points at 921.05 compared with spot closing of 933.25. The numbers of contracts traded were 21,837.

Dabur August 2018 futures traded at a premium of 0.25 points at 422.25 compared with spot closing of 422.00. The numbers of contracts traded were 21,361.

Among Nifty calls, 11400 SP from the August month expiry was the most active call with an addition of 0.34 million open interests. Among Nifty puts, 11200 SP from the August month expiry was the most active put with an addition of 0.46 million open interests. The maximum OI outstanding for Calls was at 11,400 SP (2.78mn) and that for Puts was at 11,000 SP (4.72 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,392.42 ---- Pivot Point 11,330.08 --- Support --- 11294.17.

The Nifty Put Call Ratio (PCR) finally stood at 1.45 for August month contract. The top five scrips with highest PCR on OI were Godfrey Phillips India (3.60), Ramco Cements (1.65), Dish TV (1.41), Oil India (1.38) and ACC India (1.37).

Among most active underlying, Reliance Industries witnessed an addition of 3.06 million units of Open Interest in the August month futures contract, followed by Axis Bank witnessing a contraction of 0.50 million units of Open Interest in the August month contract, State Bank of India witnessed a contraction of 0.58 million units of Open Interest in the August month contract, Dabur witnessed an addition of 0.48 million units of Open Interest in the August month contract and ICICI Bank witnessed a contraction of 4.61 million units of Open Interest in the August month future contract.