The local equity benchmark Nifty ended at fresh closing high on Tuesday, surpassing its crucial psychological level of 11,700. The index made a positive start and traded firmly throughout the session, after National Council of Applied Economic Research (NCAER) retained India’s gross domestic product (GDP) growth forecast at 7.4% for the current fiscal (FY19), citing comfortable agricultural sector outlook and a marked improvement in the external sector. The sentiments were positive with the Department of Industrial Policy and Promotion’s (DIPP) latest data showing that foreign direct investment (FDI) in India grew by 23% to $12.75 billion during the April-June quarter of 2018-19, as compared to foreign fund inflows of $10.4 billion in April-June 2017-18.
Further, in second half of the session, firm trade continued on the index, following positive trend in global markets. Adding some optimism, Commerce Minister Suresh Prabhu said that the government is working on a comprehensive strategy in a bid to double India’s export by the year 2025. He also said that the meeting of different exports’ stakeholders discussed a strategy for revitalizing India’s exports. Traders took some support with a private report stating that the banking, financial services and insurance (BFSI) sector could create 9 lakh (0.9 million) jobs in the next four years. Domestic sentiments were also supported by finance minister Arun Jaitley’s statement the government is looking at achieving economic growth higher than predicted by many in the current financial year and India could become the fifth largest economy (surpassing the UK) next year.
Traders were seen piling up positions in Metal, Fin Service and Auto, while selling was witnessed in PSU Bank, Realty and Pharma. The top gainers from the F&O segment were Adani Enterprises, Jet Airways (India) and Equitas Holdings. On the other hand, the top losers were PC Jeweller, GAIL and Union Bank of India. In the index option segment, maximum OI continues to be seen in the 11,400-11,700 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 1.53% and reached 12.42. The 50-share Nifty was up by 46.55 points or 0.40% to settle at 11,738.50.
Nifty August 2018 futures closed at 11752.45 on Tuesday, at a premium of 13.95 points over spot closing of 11738.50, while Nifty September 2018 futures ended at 11789.30, at a premium of 50.80 points over spot closing. Nifty August futures saw a contraction of 5.32 million (mn) units, taking the total outstanding open interest (OI) to 21.85 mn units. The near month derivatives contract will expire on August 30, 2018.
From the most active contracts, Reliance Industries August 2018 futures traded at a discount of 3.70 points at 1318.80 compared with spot closing of 1322.50. The numbers of contracts traded were 32,312.
Yes Bank August 2018 futures traded at a premium of 0.80 points at 371.40 compared with spot closing of 370.60. The numbers of contracts traded were 30,897.
Axis Bank August 2018 futures traded at a premium of 2.60 points at 661.95 compared with spot closing of 659.35. The numbers of contracts traded were 26,020.
Tata Steel August 2018 futures traded at a premium of 0.45 points at 590.10 compared with spot closing of 589.65. The numbers of contracts traded were 25,722.
Vedanta August 2018 futures traded at a premium of 0.70 points at 231.05 compared with spot closing of 230.35. The numbers of contracts traded were 24,051.
Among Nifty calls, 11800 SP from the August month expiry was the most active call with an addition of 0.23 million open interests. Among Nifty puts, 11700 SP from the August month expiry was the most active put with an addition of 1.62 million open interests. The maximum OI outstanding for Calls was at 11,800 SP (2.65mn) and that for Puts was at 11,500 SP (3.47mn). The respective Support and Resistance levels of Nifty are: Resistance 11,762.30 ---- Pivot Point 11,736.40 --- Support --- 11,712.60.
The Nifty Put Call Ratio (PCR) finally stood at 2.08 for August month contract. The top five scrips with highest PCR on OI were Dish TV (2.14), Reliance Industries (1.60), AXIS Bank (1.42), Repco Home Finance (1.39) and JSW Steel (1.30).
Among most active underlying, Reliance Industries witnessed a contraction of 8.96 million units of Open Interest in the August month futures contract, followed by Maruti Suzuki India witnessing a contraction of 0.44 million units of Open Interest in the August month contract, Yes Bank witnessed a contraction of 7.73 million units of Open Interest in the August month contract, State Bank of India witnessed a contraction of 13.67 million units of Open Interest in the August month contract and Axis Bank witnessed a contraction of 6.48 million units of Open Interest in the August month future contract.
