Nifty extends gains for third straight session; reclaims 10,700 mark

Extending gains for the third straight session, key equity benchmark -- Nifty -- finished Wednesday’s trading session on a firm note led by heavy buying in IT and Media stocks. Nifty made a positive start as traders remained optimistic with a report that the Reserve Bank of India (RBI) Governor Urjit Patel told law makers that the note ban’s impact was transient and the economy is robust. He said the economy would get a boost from oil prices cooling off from four-year highs and asserted that the fundamentals were robust. Sentiments also remained positive with Finance Minister Arun Jaitley stating that as many as 3 lakh poor people have benefited from Ayushman Bharat health scheme in the last one-and-a-half months. Meanwhile, Union Shipping Minister Nitin Gadkari, highlighting India’s strategic advantages in the Indian Ocean Region, has said the blue economy is crucial for the country’s economic development. Market maintained a healthy momentum in second half of the session, as traders were energized with Commerce and Industry Minister Suresh Prabhu’s statement that he has taken up the issue of declining credit to exporters with the finance ministry to ensure adequate availability of funds to them. Meanwhile, the Reserve Bank of India (RBI) has decided to inject a higher amount of Rs 40,000 crore through purchase of government securities under open market operations (OMOs) in December 2018.

Traders were seen piling up positions in IT, Media and FIN Services stocks, while selling was witnessed in PSU Bank, Realty and Metal. The top gainers from the F&O segment were Adani Power, L&T Finance Holdings and MindTree. On the other hand, the top losers were Yes Bank, Infibeam Avenues and Power Finance Corporation. In the index option segment, maximum OI continues to be seen in the 9,900-10,100 calls and 10,400 -10,600 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 1.94% and reached 17.96. The 50-share Nifty was up by 43.25 points 0.40% to settle at 10,728.85.

Nifty November 2018 futures closed at 10717.90 on Wednesday, at a discount of 10.95 points over spot closing of 10728.85, while Nifty December 2018 futures ended at 10755.70, at a premium of 26.85 points over spot closing. Nifty November futures saw a contraction of 5.04 million (mn) units, taking the total outstanding open interest (OI) to 13.20 mn units. The near month derivatives contract will expire on November 29, 2018.

From the most active contracts, Yes Bank November 2018 futures traded at a premium of 0.05 points at 162.05 compared with spot closing of 162.00. The numbers of contracts traded were 78,438.

Reliance Industries November 2018 futures traded at a discount of 2.15 points at 1149.30 compared with spot closing of 1151.45. The numbers of contracts traded were 51,711.

Tata Consultancy Services November 2018 futures traded at a discount of 6.15 points at 1978.90 compared with spot closing of 1985.05. The numbers of contracts traded were 34,605.

HDFC Bank November 2018 futures traded at a discount of 8.00 points at 2083.00 compared with spot closing of 2091.00. The numbers of contracts traded were 25,571.

Infosys November 2018 futures traded at a premium of 0.05 points at 664.55 compared with spot closing of 664.50. The numbers of contracts traded were 24,369.

Among Nifty calls, 10800 SP from the November month expiry was the most active call with an addition of 0.47 million open interests. Among Nifty puts, 10,700 SP from the November month expiry was the most active put with an addition of 1.08 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (2.64mn) and that for Puts was at 10,000 SP (3.51mn). The respective Support and Resistance levels of Nifty are: Resistance 10,757.82 ---- Pivot Point 10,728.83 --- Support --- 10,699.87.

The Nifty Put Call Ratio (PCR) finally stood at 1.92 for November month contract. The top five scrips with highest PCR on OI were Adani Power (2.34), IDBI (2.29), Dalmia Bharat (1.81), Adani Ports and Special Economic Zone (1.66) and Pidilite Industries (1.35).

Among most active underlying, Reliance Industries witnessed a contraction of 12.21 million units of Open Interest in the November month futures contract, followed by Yes Bank witnessing a contraction of 34.82 million units of Open Interest in the November month contract, State Bank of India witnessed a contraction of 25.89 million units of Open Interest in the November month contract, ICICI Bank witnessed a contraction of 21.84 million units of Open Interest in the November month contract and Tata Consultancy Services witnessed a contraction of 3.64 million units of Open Interest in the November month future contract.