Key equity benchmark Nifty ended the trading session flat with positive bias on Tuesday, on renewed buying in pharmaceuticals, media and IT stocks amid optimism over US-China trade talks. The index started on a positive note, buoyed by a private report stating that India has been remarkably resilient in the recent turmoil in emerging market equities largely driven by macro stability, low policy uncertainty, improving growth and domestic flows. Market took some support with Retirement fund body the Employees’ Provident Fund Organisation (EPFO) payroll data suggesting that as many as 47.13 lakh jobs were created during September 2017 to June this year.
The index soon turned volatile and altered between red and green terrain, as investors were a bit anxious with a private report stating that the credit to micro and small enterprises in June decelerated by 2.4% from March 2018 and it also said that MSME exports appear to be affected more by GST implementation. Traders took some optimism at the end of the trading session with a report stating that Commerce and industry minister Suresh Prabhu reviewed two proposed policies- on agriculture export and new industrial policy to take the country’s exports to a new level. Besides, the GST Council may propose to bring Aviation Turbine Fuel (ATF) under the indirect tax regime in its next meeting.
All the sectoral indices ended in red on the NSE except Pharma, Media and IT. The top gainers from the F&O segment were Kajaria Ceramics, Cummins and CESC. On the other hand, the top losers were The Jet Airways, Amara Raja Batteries and DLF. In the index option segment, maximum OI continues to be seen in the 11,400-11,700 calls and 11,200- 11,500 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 1.00% and reached 12.90. The 50-share Nifty was up by 19.15 points or 0.17% to settle at 11,570.90.
Nifty August 2018 futures closed at 11586.55 on Tuesday, at a premium of 15.65 points over spot closing of 11570.90, while Nifty September 2018 futures ended at 11621.80, at a premium of 50.90 points over spot closing. Nifty August futures saw an addition of 0.16 million (mn) units, taking the total outstanding open interest (OI) to 30.17 mn units. The near month derivatives contract will expire on August 30, 2018.
From the most active contracts, Tata Steel August 2018 futures traded at a discount of 0.50 points at 583.50 compared with spot closing of 584.00. The numbers of contracts traded were 28,220.
Tata Motors August 2018 futures traded at a premium of 0.65 points at 269.15 compared with spot closing of 268.50. The numbers of contracts traded were 26,356.
Reliance Industries August 2018 futures traded at a discount of 0.15 points at 1246.55 compared with spot closing of 1246.70. The numbers of contracts traded were 23,196.
Axis Bank August 2018 futures traded at a premium of 1.55 points at 638.05 compared with spot closing of 636.50. The numbers of contracts traded were 22,590.
Sun Pharma August 2018 futures traded at a premium of 0.20 points at 635.60 compared with spot closing of 635.40. The numbers of contracts traded were 20,741.
Among Nifty calls, 11600 SP from the August month expiry was the most active call with an addition of 0.03 million open interests. Among Nifty puts, 11500 SP from the August month expiry was the most active put with an addition of 0.66 million open interests. The maximum OI outstanding for Calls was at 11,600 SP (3.41mn) and that for Puts was at 11,400 SP (4.35mn). The respective Support and Resistance levels of Nifty are: Resistance 11,588.57 ---- Pivot Point 11,564.08 --- Support --- 11,546.42.
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 (2.27), ACC (1.51), Havells India (1.29), Axis Bank (1.26) and Reliance Industries (1.26).
Among most active underlying, Reliance Industries witnessed a contraction of 1.15 million units of Open Interest in the August month futures contract, followed by Axis Bank witnessing a contraction of 0.65 million units of Open Interest in the August month contract, Tata Steel witnessed a contraction of 3.45 million units of Open Interest in the August month contract, ICICI Bank witnessed a contraction of 5.90 million units of Open Interest in the August month contract and State Bank of India witnessed a contraction of 1.08 million units of Open Interest in the August month future contract.
