Nifty settles higher for third straight session

Key benchmark Nifty ended Tuesday’s trading session at a higher note, continuing its winning-streak for the third straight day, as the corporate earnings season bought some cheer on the street. The barometer made a gap-up opening and traded in green throughout the day, as market participants took some optimism with a report that India’s trade deficit declined to a five-month low in September even as exports contracted, providing some respite from the rising gap that has sparked concern about the current account deficit (CAD). Trade deficit declined to $13.98 billion in September from $17.39 billion in August following slower growth in imports. Some support also came with a report that Saudi Arabia committed to meeting India’s rising oil demand and said it is keen to invest in fuel retailing and petrochemical business in the world’s fastest-growing energy consumer.

However, market pared some of its gains in the afternoon deals, as investors were on sidelines with private report that merchandise exports witnessed the worst contraction in 26 months in September despite a weak rupee, thanks mainly to an unfavourable base. But, the barometer soon gained traction in last hour of trade, as optimism remained among the traders, with report that India and the UAE deliberated on opportunities for cooperation and investment in both the countries, in order to drive investments in areas including highways, airports and infrastructure. Besides, a private report also stated that strong earnings, promising demographics and big ticket deals drove the M&A activity, clocking deals worth $76 billion in January-September from over 350 transactions.

All the sectoral indices ended in green on the NSE. The top gainers from the F&O segment were The South Indian Bank, Multi Commodity Exchange of India and Jaiprakash Associates. On the other hand, the top losers were Tata Communications, Indiabulls Housing Finance and Dewan Housing Finance Corporation. In the index option segment, maximum OI continues to be seen in the 10,800-11,200 calls and 9,900 -10,200 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 8.01% and reached 17.37. The 50-share Nifty was up by 72.25 points or 0.69% to settle at 10,584.75.

Nifty October 2018 futures closed at 10589.85 on Tuesday, at a premium of 5.10 points over spot closing of 10584.75, while Nifty November 2018 futures ended at 10639.40, at a premium of 54.65 points over spot closing. Nifty October futures saw an addition of 0.83 million (mn) units, taking the total outstanding open interest (OI) to 20.62 mn units. The near month derivatives contract will expire on October 25, 2018.

From the most active contracts, The Federal Bank October 2018 futures traded at a premium of 0.25 points at 81.90 compared with spot closing of 81.65. The numbers of contracts traded were 29,018.

IndusInd Bank October 2018 futures traded at a discount of 0.25 points at 1625.75 compared with spot closing of 1626.00. The numbers of contracts traded were 27,601.

Indiabulls Housing Finance October 2018 futures traded at a discount of 2.50 points at 897.50 compared with spot closing of 900.00. The numbers of contracts traded were 26,739.

Reliance Industries October 2018 futures traded at a discount of 2.85 points at 1163.15 compared with spot closing of 1166.00. The numbers of contracts traded were 22,539.

State Bank of India October 2018 futures traded at a premium of 0.65 points at 271.00 compared with spot closing of 270.35. The numbers of contracts traded were 19,588.

Among Nifty calls, 10600 SP from the October month expiry was the most active call with an addition of 0.29 million open interests. Among Nifty puts, 10,500 SP from the October month expiry was the most active put with an addition of 0.87 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.73mn) and that for Puts was at 10,000 SP (3.59mn). The respective Support and Resistance levels of Nifty are: Resistance 10,618.00 ---- Pivot Point 10,571.65 --- Support --- 10,538.40.

The Nifty Put Call Ratio (PCR) finally stood at 1.01 for October month contract. The top five scrips with highest PCR on OI were Page Industries (5.00), Equitas Holdings (1.46), Berger Paints India (1.39), Oil India (1.24) and Ajanta Pharma (1.14).

Among most active underlying, Reliance Industries witnessed a contraction of 0.23 million units of Open Interest in the October month futures contract, followed by Infosys witnessing an addition of 1.94 million units of Open Interest in the October month contract, Tata Consultancy Services witnessed a contraction of 0.07 million units of Open Interest in the October month contract, State Bank of India witnessed a contraction of 0.72 million units of Open Interest in the October month contract and Bajaj Finance witnessed a contraction of 0.08 million units of Open Interest in the October month future contract.