Nifty ends at new high of 11,470 level

Key equity benchmark Nifty ended the Friday’s trading session on a positive note, erasing yesterday’s losses. The index settled at a new high of 11,470 level, surging 85 points. The trading session started on an optimistic note as traders took encouragement from a private report stating that India's economy is expected to grow at a healthy 7.5% in the first quarter (Q1) of 2018-19 (FY19), lower than a seven-quarter high of 7.7% in the fourth quarter (Q4) of 2017-18 (FY18). Markets took support from Niti Aayog vice chairman Rajiv Kumar’s statement that the falling rupee is not a cause of worry as it is getting back to its natural value. The rupee rose by about 17% during the last three years. Since the beginning of this year, rupee has declined by only 9.8%. So, it has recovered.

In the afternoon session, the market was at day’s peak, on the back of heavy buying by traders in PSU Bank, FMCG and Metal stocks. Banking stocks jumped over 1 percent as the RBI’s latest data showing that bank credit grew 12.70% to Rs 86,79,741 crore in the fortnight to August 3, while in the year-ago fortnight, bank advances was at Rs 77,01,926 crore. Traders overlooked a report that a foreign brokerage warned of worsening fiscal position due to poll-related spending spree before next May when the new Parliament has to be instituted. It has projected the consolidated fiscal deficit for FY19 at 6.5% of GDP against a budgeted 5.9%, which is only 10 bps lower than FY18. Besides, a report also highlighted that investments through participatory notes into Indian capital markets plunged to over nine-year low of Rs 80,341 crore till July-end amid stringent norms put in place by the watchdog SEBI to check misuse of these instruments.

All the sectoral indices ended in green on the NSE. The top gainers from the F&O segment were GMR Infrastructure, Dalmia Bharat and IFCI. On the other hand, the top losers were The Federal Bank, Repco Home Finance and NBCC. 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 3.55% and reached 13.16. The 50-share Nifty was up by 85.70 points or 0.75% to settle at 11,470.75.

Nifty August 2018 futures closed at 11488.45 on Friday, at a premium of 17.70 points over spot closing of 11470.75, while Nifty September 2018 futures ended at 11525.10, at a premium of 54.35 points over spot closing. Nifty August futures saw an addition of 0.82 million (mn) units, taking the total outstanding open interest (OI) to 29.56 mn units. The near month derivatives contract will expire on August 30, 2018.

From the most active contracts, Sun Pharmaceutical August 2018 futures traded at a premium of 3.00 points at 623.90 compared with spot closing of 620.90. The numbers of contracts traded were 25,483.

State Bank of India August 2018 futures traded at a premium of 0.65 points at 302.85 compared with spot closing of 302.20. The numbers of contracts traded were 21,575.

Tata Steel August 2018 futures traded at a premium of 1.60 points at 582.30 compared with spot closing of 580.70. The numbers of contracts traded were 19,794.

Axis Bank August 2018 futures traded at a premium of 1.40 points at 628.50 compared with spot closing of 627.10. The numbers of contracts traded were 19,752.

Yes Bank August 2018 futures traded at a discount of 1.15 points at 393.60 compared with spot closing of 394.75. The numbers of contracts traded were 18,614.

Among Nifty calls, 11500 SP from the August month expiry was the most active call with a contraction of 0.89 million open interests. Among Nifty puts, 11400 SP from the August month expiry was the most active put with an addition of 0.93 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 (4.61mn). The respective Support and Resistance levels of Nifty are: Resistance 11,494.20 ---- Pivot Point 11,463.00 --- Support --- 11,439.55.

The Nifty Put Call Ratio (PCR) finally stood at 1.47 for August month contract. The top five scrips with highest PCR on OI were Dish TV (1.82), Axis Bank (1.45), ICICI Bank (1.29), Interglobe Aviation (1.28) and Adani Enterprises (1.27).

Among most active underlying, Reliance Industries witnessed a contraction of 0.12 million units of Open Interest in the August month futures contract, followed by State Bank of India witnessing an addition of 0.52 million units of Open Interest in the August month contract, Sun Pharma witnessed a contraction of 1.45 million units of Open Interest in the August month contract, ICICI Bank witnessed an addition of 0.31 million units of Open Interest in the August month contract and Axis Bank witnessed an addition of 0.17 million units of Open Interest in the August month future contract.