Nifty ends flat with positive bias

Indian equity benchmark Nifty ended the trading session flat with a positive bias on Tuesday. The index started on a positive note, buoyed by Rating agency ICRA’s latest report highlighting that revenues of Indian corporates have jumped 22% in the first quarter of current financial year (Q1FY19) as compared to same quarter in previous year. The increase in revenues has been attributed to the strong growth in both consumer-based industries and commodity sectors. Some support also came with a report stating that the government will set up a group of ministers (GoM) to look into issues related to the proposed mega free trade agreement the Regional Comprehensive Economic Partnership (RCEP).

However, Nifty soon turned volatile to alter between red and green terrain, as domestic sentiments got hit with president of the International Economic Association, and former chief economist at the World Bank, Kaushik Basu’s statement that in the event of US-China currency war there will be a sideline effect on India and a depreciation of the rupee, which, if managed well by policymakers, will be good for the country. Traders also got cautious with a report stating that the rupee is over-valued and the fair value of the local currency is 70-71 to a greenback. The widening current account deficit and higher interest rates have made the rupee the worst among its Asian peers so far this year.

Traders were seen piling up positions in Media, Metal and Auto, while selling was witnessed in PSU Bank, Realty and Pharma. The top gainers from the F&O segment were NMDC, TV18 Broadcast and Tata Steel. On the other hand, the top losers were Adani Power, Punjab National Bank and Max Financial Services. 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 0.12% and reached 12.57. The 50-share Nifty was up by 2.35 points or 0.02% to settle at 11,389.45.

Nifty August 2018 futures closed at 11418.35 on Tuesday, at a premium of 28.90 points over spot closing of 11389.45, while Nifty September 2018 futures ended at 11446.95, at a premium of 57.50 points over spot closing. Nifty August futures saw an addition of 0.32 million (mn) units, taking the total outstanding open interest (OI) to 26.68 mn units. The near month derivatives contract will expire on August 30, 2018.

From the most active contracts, Punjab National Bank August 2018 futures traded at a premium of 0.35 points at 83.25 compared with spot closing of 82.90. The numbers of contracts traded were 53,560.

TVS Motor August 2018 futures traded at a premium of 1.50 points at 548.85 compared with spot closing of 547.35. The numbers of contracts traded were 28,475.

Axis Bank August 2018 futures traded at a premium of 1.90 points at 593.80 compared with spot closing of 591.90. The numbers of contracts traded were 27,828.

Tata Steel August 2018 futures traded at a premium of 0.90 points at 576.40 compared with spot closing of 575.50. The numbers of contracts traded were 25,601.

Motherson Sumi Systems August 2018 futures traded at a premium of 0.15 points at 303.95 compared with spot closing of 303.80. The numbers of contracts traded were 22,996.

Among Nifty calls, 11400 SP from the August month expiry was the most active call with an addition of 0.20 million open interests. Among Nifty puts, 11300 SP from the August month expiry was the most active put with an addition of 0.13 million open interests. The maximum OI outstanding for Calls was at 11,500 SP (3.85mn) and that for Puts was at 11,000 SP (5.12mn). The respective Support and Resistance levels of Nifty are: Resistance 11,425.70 ---- Pivot Point 11,392.70 --- Support --- 11,356.45.

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 Dish TV (1.76), Adani Enterprises (1.34), Interglobe Aviation (1.28), ICICI Bank (1.26) and ACC India (1.25).

Among most active underlying, Punjab National Bank witnessed an addition of 3.92 million units of Open Interest in the August month futures contract, followed by Reliance Industries witnessing a contraction of 0.25 million units of Open Interest in the August month contract, Axis Bank witnessed an addition of 0.04 million units of Open Interest in the August month contract, ICICI Bank witnessed an addition of 0.85 million units of Open Interest in the August month contract and State Bank of India witnessed an addition of 1.78 million units of Open Interest in the August month future contract.