Nifty ends higher; settles above 11,350 mark

Continuing previous session’s northward journey, the local equity benchmark Nifty settled at record closing high on Monday. After a positive start, the index remained firm throughout the session, aided by Principal Economic advisor to the Finance Ministry Sanjeev Sanyal’s statement that the GST slabs may be brought down to three in the long-term, along with the exemption category, in order to further simplify the India’s tax regime. Traders remained optimistic with the Confederation of Indian Industry’s (CII) statement that with the US imposing an additional 25% duty on imports worth $34 billion from China, certain Indian products may become more competitive. Some support also came with the Reserve Bank of India’s (RBI) latest data showing that bank credit jumped 12.44% to Rs 86,13,164 crore in the fortnight to July 20 as compared to Rs 76,59,898 crore same period last year.

However, the Nifty trimmed some of its gains in last leg of trade, on the back of weak European markets. The street got worried, as the government said it will take action against over 2.25 lakh companies as they have not filed requisite financial statement for 2015-16 and 2016-17. Adding some concerns, Care Ratings in its latest report said that the monsoon deficit is likely to lead to lower production. The report further noted that the country is still facing a rainfall deficit of 7%, on a cumulative basis and the overall sown area is 7.5% less than last year. Separately, Finance Ministry has said that foreigners coming to India may not get the Goods and Services Tax (GST) refunds on goods purchased and carried back by them as the government has not invoked relevant provisions of the Integrated Goods and Services Tax Act yet. But, market managed to end at record closing high as some support came with a report showing that foreign investors have poured in over Rs 2,300 crore in the Indian capital markets in July, after pulling out funds for three months in a row.

Traders were seen piling up positions in PSU Bank, Metal and Bank, while selling was witnessed in Pharma, FMCG and Realty. The top gainers from the F&O segment were InterGlobe Aviation, Balrampur Chini Mills and IDFC. On the other hand, the top losers were Suzlon Energy, Apollo Tyres and GAIL (India). 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 increased by 4.02% and reached 12.56. The 50-share Nifty was up by 26.30 points or 0.23% to settle at 11,387.10.

Nifty August 2018 futures closed at 11414.25 on Monday, at a premium of 27.15 points over spot closing of 11387.10, while Nifty September 2018 futures ended at 11439.25, at a premium of 52.15 points over spot closing. Nifty August futures saw an addition of 0.14 million (mn) units, taking the total outstanding open interest (OI) to 26.35 mn units. The near month derivatives contract will expire on August 30, 2018.

From the most active contracts, Axis Bank August 2018 futures traded at a premium of 0.80 points at 596.70 compared with spot closing of 595.90. The numbers of contracts traded were 33,428.

State Bank of India August 2018 futures traded at a premium of 0.20 points at 309.10 compared with spot closing of 308.90. The numbers of contracts traded were 24,767.

ICICI Bank August 2018 futures traded at a discount of 0.30 points at 314.20 compared with spot closing of 314.50. The numbers of contracts traded were 22,244.

Arvind August 2018 futures traded at a premium of 2.75 points at 418.95 compared with spot closing of 416.20. The numbers of contracts traded were 15,681.

Punjab National Bank August 2018 futures traded at a premium of 0.75 points at 90.70 compared with spot closing of 89.95. The numbers of contracts traded were 14,741.

Among Nifty calls, 11400 SP from the August month expiry was the most active call with a contraction of 0.08 million open interests. Among Nifty puts, 11300 SP from the August month expiry was the most active put with an addition of 0.39 million open interests. The maximum OI outstanding for Calls was at 11,500 SP (3.46mn) and that for Puts was at 11,000 SP (5.08mn). The respective Support and Resistance levels of Nifty are: Resistance 11,419.63 ---- Pivot Point 11,395.12 --- Support --- 11,362.58.

The Nifty Put Call Ratio (PCR) finally stood at 1.44 for August month contract. The top five scrips with highest PCR on OI were Dish TV (1.71), Axis Bank (1.34), ACC India (1.29), ICICI Bank (1.29) and InterGlobe Aviation (1.26).

Among most active underlying, Axis Bank witnessed an addition of 1.60 million units of Open Interest in the August month futures contract, followed by Reliance Industries witnessing a contraction of 0.41 million units of Open Interest in the August month contract, State Bank of India witnessed an addition of 2.81 million units of Open Interest in the August month contract, ICICI Bank witnessed a contraction of 1.32 million units of Open Interest in the August month contract and Arvind witnessed an addition of 1.15 million units of Open Interest in the August month future contract.