Logging strong gains of over 1%, the key Indian equity benchmark Nifty ended on optimistic note on Monday. After a cheerful start, the index continued its northward journey throughout the day, as investors’ sentiments got some support with Former Niti Aayog vice-chairman Arvind Panagariya’s statement that Rupee depreciation is not cause to worry and it was pending for a long time. He also said India’s macroeconomic management is sound. Adding some optimism on the street, Finance Minister Arun Jaitley said that a series of reforms taken by the government transformed the weak economy. He also said that the reform measures has substantially cleaned up the system and made it more transparent, noting that decisiveness has led to easier decision-making and made the economy stand out before several other countries.
Market maintained the gaining momentum till end of the session, following firm global markets. Market participants took support with a report highlighting that foreign investors have pumped in a little over Rs 6,700 crore into the Indian capital markets so far this month on improvement on the macro front, better corporate earnings and correction in the mid and small-cap space. The latest inflow comes following a net infusion of over Rs 2,300 crore in the capital markets both equity and debt last month. Some support also came with a private report that the rupee is likely to average at 69 per US dollar this financial year, largely driven by stronger domestic macro fundamentals and foreign fund flows.
All the sectoral indices ended in green on the NSE. The top gainers from the F&O segment were Adani Power, Rural Electrification Corporation and Piramal Enterprises. On the other hand, the top losers were Jaiprakash Associates, LIC Housing Finance and Repco Home Finance. In the index option segment, maximum OI continues to be seen in the 11,500-11,900 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 1.37% and reached 12.23. The 50-share Nifty was up by 134.85 points or 1.17% to settle at 11,691.95.
Nifty August 2018 futures closed at 11705.35 on Monday, at a premium of 13.40 points over spot closing of 11691.95, while Nifty September 2018 futures ended at 11741.95, at a premium of 50.00 points over spot closing. Nifty August futures saw a contraction of 2.36 million (mn) units, taking the total outstanding open interest (OI) to 27.17 mn units. The near month derivatives contract will expire on August 30, 2018.
From the most active contracts, State Bank of India August 2018 futures traded at a premium of 0.80 points at 307.75 compared with spot closing of 306.95. The numbers of contracts traded were 23,371.
Axis Bank August 2018 futures traded at a premium of 2.85 points at 650.85 compared with spot closing of 648.00. The numbers of contracts traded were 22,356.
ICICI Bank August 2018 futures traded at a discount of 0.60 points at 339.20 compared with spot closing of 339.80. The numbers of contracts traded were 22,274.
Tata Steel August 2018 futures traded at a premium of 3.10 points at 582.45 compared with spot closing of 579.35. The numbers of contracts traded were 20,619.
Sun Pharma August 2018 futures traded at a premium of 1.90 points at 623.40 compared with spot closing of 621.50. The numbers of contracts traded were 19,184.
Among Nifty calls, 11700 SP from the August month expiry was the most active call with a contraction of 0.07 million open interests. Among Nifty puts, 11600 SP from the August month expiry was the most active put with an addition of 1.92 million open interests. The maximum OI outstanding for Calls was at 11,700 SP (2.81mn) and that for Puts was at 11,000 SP (4.08mn). The respective Support and Resistance levels of Nifty are: Resistance 11,730.07 ---- Pivot Point 11,662.83 --- Support --- 11,624.72.
The Nifty Put Call Ratio (PCR) finally stood at 1.84 for August month contract. The top five scrips with highest PCR on OI were Dish TV (2.17), Reliance Industries (1.48), AXIS Bank (1.29), ACC (1.23) and Repco Home Finance (1.17).
Among most active underlying, Reliance Industries witnessed a contraction of 5.14 million units of Open Interest in the August month futures contract, followed by State Bank of India witnessing a contraction of 10.24 million units of Open Interest in the August month contract, ICICI Bank witnessed a contraction of 12.89 million units of Open Interest in the August month contract, Axis Bank witnessed a contraction of 7.32 million units of Open Interest in the August month contract and Infosys witnessed a contraction of 3.19 million units of Open Interest in the August month future contract.
