Nifty ends higher; surpasses 11,350 level

Surpassing a crucial psychological level of 11,350, the local benchmark Nifty ended Wednesday’s session higher, with gains of more than 80 points. The index made a cautious start ahead of macroeconomic data such as Index of Industrial Production (IIP) and Consumer Price Index (CPI) to be announced after the market hours. Some concerns came with a private report stating that regulatory policies pose the biggest risks for companies over the next three years, followed by cyber security and technology disruptions. The report showed a divide on the viewpoint of risk management amongst Indian organisations. 

But, the market witnessed heavy buying in late afternoon deals and ended in green, as India's exports grew by 19.21% to $27.84 billion in August on account of healthy performance by sectors such as petroleum. Traders took some support with the department of financial services (DFS) expecting good recovery of bad loans by the public sector banks (PSBs) in the second quarter of the current financial year. Some support also came with Moody’s Investors Service’s report stating that the sharp depreciation in rupee’s valuation is unlikely to impact India’s sovereign credit profile as rupee-denominated government bonds and robust foreign exchange reserves mitigate the risk.

All the sectoral indices ended in green on the NSE except Realty, PVT Bank and Media. The top gainers from the F&O segment were Amara Raja Batteries, Jain Irrigation Systems and Jindal Steel & Power. On the other hand, the top losers were Godrej Consumer Products, Granules India and Reliance Capital. In the index option segment, maximum OI continues to be seen in the 11,600-12,000 calls and 11,300 -11,600 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 7.05% and reached 14.25. The 50-share Nifty was up by 82.40 points or 0.73% to settle at 11,369.90.

Nifty September 2018 futures closed at 11417.35 on Wednesday, at a premium of 47.45 points over spot closing of 11369.90, while Nifty October 2018 futures ended at 11456.95, at a premium of 87.05 points over spot closing. Nifty September futures saw a contraction of 0.64 million (mn) units, taking the total outstanding open interest (OI) to 27.20 mn units. The near month derivatives contract will expire on September 27, 2018.

From the most active contracts, Reliance Industries September 2018 futures traded at a premium of 7.75 points at 1258.85 compared with spot closing of 1251.10. The numbers of contracts traded were 26,761.

Yes Bank September 2018 futures traded at a premium of 1.80 points at 315.80 compared with spot closing of 314.00. The numbers of contracts traded were 26,359.

Tata Steel September 2018 futures traded at a premium of 3.55 points at 608.75 compared with spot closing of 605.20. The numbers of contracts traded were 23,388.

Axis Bank September 2018 futures traded at a premium of 3.30 points at 639.30 compared with spot closing of 636.00. The numbers of contracts traded were 21,908.

SBI September 2018 futures traded at a premium of 1.05 points at 286.90 compared with spot closing of 285.85. The numbers of contracts traded were 20,803.

Among Nifty calls, 11400 SP from the August month expiry was the most active call with an addition of 0.28 million open interests. Among Nifty puts, 11300 SP from the August month expiry was the most active put with a contraction of 0.004 million open interests. The maximum OI outstanding for Calls was at 11,800 SP (4.39mn) and that for Puts was at 11,400 SP (4.14mn). The respective Support and Resistance levels of Nifty are: Resistance 11,417.03 ---- Pivot Point 11,333.62 --- Support --- 11,286.48.

The Nifty Put Call Ratio (PCR) finally stood at 1.03 for August month contract. The top five scrips with highest PCR on OI were Repco Home Finance (1.58), Shree Cement (1.00), Axis Bank (0.93), Dewan Housing Finance Corporation (0.90) and Irb Infrastructure Developers (0.89).

Among most active underlying, Reliance Industries witnessed a contraction of 0.23 million units of Open Interest in the September month futures contract, followed by State Bank of India witnessing a contraction of 2.20 million units of Open Interest in the September month contract, Bajaj Finance witnessed an addition of 0.38 million units of Open Interest in the September month contract, Axis Bank witnessed a contraction of 1.10 million units of Open Interest in the September month contract and Maruti Suzuki India witnessed a contraction of 0.006 million units of Open Interest in the September month future contract.