Nifty ends at all time closing high

The local equity benchmark Nifty ended at an all-time closing high on Wednesday. After a positive opening, the index turned volatile during early trade, as traders got cautious with credit rating agency ICRA’s latest report that in spite of corporates witnessing a healthy 22% revenue growth in the June quarter, most have seen flat margins, with airline and cement companies seeing declining margins due to rising input costs and crude prices. Domestic sentiments also got hit after the Ministry of Corporate Affairs issued ‘preliminary notices’ to 272 companies for alleged non-compliance with CSR provisions under the companies law. Some concerns also came with Care Ratings’ report stating that there has been a marginal decline of 1% in employment growth at 6.6%, mainly due to a larger number of companies having witnessed lower or negative hiring growth. It added that the employment growth in 2016-17, was at 7.7%.

However, the Nifty gained momentum in noon session, despite mixed cues from global markets. The street got some boost with International Monetary Fund’s (IMF) statement that India is a source of growth for the global economy for the next few decades and it could be what China was for the world economy. It further noted that the country now contributes, in purchasing power parity measures, 15% of the growth in the global economy, which is substantial. The markets participants also took support with a report that government doubled import duty to 20% on 328 tariff lines of textile products, with an aim to boost domestic manufacturing and create employment opportunities. 

Traders were seen piling up positions in PSU Bank, Bank and PVT Bank, while selling was witnessed in Pharma, Auto and Realty. The top gainers from the F&O segment were Reliance Communications, Adani Enterprises and Adani Power. On the other hand, the top losers were Rural Electrification Corporation, BEML and Indian Bank. 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 0.30% and reached 12.54. The 50-share Nifty was up by 60.55 points or 0.53% to settle at 11,450.00.

Nifty August 2018 futures closed at 11467.65 on Wednesday, at a premium of 17.65 points over spot closing of 11450.00, while Nifty September 2018 futures ended at 11496.55, at a premium of 46.55 points over spot closing. Nifty August futures saw an addition of 0.88 million (mn) units, taking the total outstanding open interest (OI) to 27.56 mn units. The near month derivatives contract will expire on August 30, 2018.

From the most active contracts, Lupin August 2018 futures traded at a premium of 2.30 points at 824.45 compared with spot closing of 822.15. The numbers of contracts traded were 48,251.

Reliance Industries August 2018 futures traded at a discount of 0.55 points at 1220.25 compared with spot closing of 1220.80. The numbers of contracts traded were 27,557.

Strides Shasun August 2018 futures traded at a premium of 3.15 points at 417.10 compared with spot closing of 413.95. The numbers of contracts traded were 26,902.

Ashok Leyland August 2018 futures traded at a premium of 0.10 points at 125.95 compared with spot closing of 125.85. The numbers of contracts traded were 19,351.

Tata Steel August 2018 futures traded at a premium of 2.00 points at 579.20 compared with spot closing of 577.20. The numbers of contracts traded were 19,339.

Among Nifty calls, 11500 SP from the August month expiry was the most active call with a contraction of 0.21 million open interests. Among Nifty puts, 11400 SP from the August month expiry was the most active put with an addition of 0.79 million open interests. The maximum OI outstanding for Calls was at 11,500 SP (3.65mn) and that for Puts was at 11,000 SP (5.25mn). The respective Support and Resistance levels of Nifty are: Resistance 11,480.20 ---- Pivot Point 11,429.75 --- Support --- 11,399.55.

The Nifty Put Call Ratio (PCR) finally stood at 1.55 for August month contract. The top five scrips with highest PCR on OI were Dish TV (1.74), Reliance Industries (1.40), Adani Enterprises (1.38), Axis Bank (1.33) and ICICI Bank (1.26).

Among most active underlying, Reliance Industries witnessed a contraction of 0.57 million units of Open Interest in the August month futures contract, followed by Lupin witnessing an addition of 1.14 million units of Open Interest in the August month contract, Bajaj Finance witnessed a contraction of 0.008 million units of Open Interest in the August month contract, ICICI Bank witnessed an addition of 1.22 million units of Open Interest in the August month contract and State Bank of India witnessed an addition of 2.41 million units of Open Interest in the August month future contract.