Nifty erases losses to end higher

Logging gains of 0.31%, the local benchmark Nifty ended higher on Monday. The index made a weak start and turned choppy during the day, amid a private report that foreign investors have pulled out over Rs 9,300 crore ($1.3 billion) from the Indian capital markets in the last four trading sessions on unabated fall in rupee and rise in crude oil price. Investors got worried with Federation of Indian Export Organisations’ (FIEO) statement that the rupee depreciation is increasing the cost of imported capital goods, inputs and various services used by exporters paid in foreign currency, particularly the freight charges. The market participants also reacted negatively to the Reserve Bank of India’s (RBI) statement that the Centre and states should stick to the fiscal deficit target as any slippage will have an adverse bearing on inflation and increase market volatility.

The Nifty hit the intraday low point, later in the day, as selling pressure gathered momentum. Some concerns also came with reports that Indian companies raised Rs 12,470 crore through initial public offerings (IPOs) in April-September this fiscal, a plunge of 53% from the year-ago period, mainly due to volatile equity markets and uncertainties in macro environment. However, amid buying towards the fag-end, the market recovered to close the day in green terrain. Traders took some encouragement with the World Bank’s latest report stating that growth in India is firming up and projected to accelerate to 7.3% in the 2018-19 fiscal and 7.5% in the next two years. Some support also came with a report that investments in the Indian capital market through participatory notes climbed to Rs 84,647 crore till August-end, making it the first rise in such fund infusion in 10 months.

Traders were seen piling up positions in PSU Bank, PVT Bank and Bank stocks, while selling was witnessed in Realty, Metal and IT. The top gainers from the F&O segment were Hindustan Petroleum Corporation, Yes Bank and Indian Oil Corporation. On the other hand, the top losers were Dewan Housing Finance Corporation, Tata Elxsi and Shriram Transport Finance Company. In the index option segment, maximum OI continues to be seen in the 10,800-11,200 calls and 10,300 -10,700 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 2.10% and reached 20.14. The 50-share Nifty was up by 31.60 points or 0.31% to settle at 10,348.05.

Nifty October 2018 futures closed at 10379.00 on Monday, at a premium of 30.95 points over spot closing of 10348.05, while Nifty November 2018 futures ended at 10426.50, at a premium of 78.45 points over spot closing. Nifty October futures saw an addition of 0.13 million (mn) units, taking the total outstanding open interest (OI) to 20.32 mn units. The near month derivatives contract will expire on October 25, 2018.

From the most active contracts, Reliance Industries October 2018 futures traded at a premium of 3.35 points at 1113.35 compared with spot closing of 1110.00. The numbers of contracts traded were 62,633.

Yes Bank October 2018 futures traded at a premium of 0.55 points at 222.30 compared with spot closing of 221.75. The numbers of contracts traded were 44,386.

Vedanta October 2018 futures traded at a discount of 0.10 points at 207.20 compared with spot closing of 207.30. The numbers of contracts traded were 38,488.

Bajaj Finance October 2018 futures traded at a premium of 20.90 points at 1982.90 compared with spot closing of 1962.00. The numbers of contracts traded were 33,793.

Indiabulls Housing Finance October 2018 futures traded at a discount of 7.65 points at 933.35 compared with spot closing of 941.00. The numbers of contracts traded were 31,577.

Among Nifty calls, 10500 SP from the October month expiry was the most active call with an addition of 0.71 million open interests. Among Nifty puts, 10,000 SP from the October month expiry was the most active put with an addition of 1.46 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.35mn) and that for Puts was at 10,500 SP (3.26mn). The respective Support and Resistance levels of Nifty are: Resistance 10,431.47 ---- Pivot Point 10,314.93 --- Support --- 10,231.52.

The Nifty Put Call Ratio (PCR) finally stood at 0.90 for October month contract. The top five scrips with highest PCR on OI were Bosch (2.00), Berger Paints India (1.66), Repco Home Finance (1.44), Ajanta Pharma (1.41) and Cholamandalam Investment and Finance (1.32).

Among most active underlying, Reliance Industries witnessed a contraction of 2.32 million units of Open Interest in the October month futures contract, followed by Bajaj Finance witnessing an addition of 0.02 million units of Open Interest in the October month contract, ICICI Bank witnessed a contraction of 0.72 million units of Open Interest in the October month contract, Yes Bank witnessed an addition of 5.60 million units of Open Interest in the October month contract and Maruti Suzuki India witnessed a contraction of 0.004 million units of Open Interest in the October month future contract.