Buying in late trade takes Nifty above 11,340 mark

Key equity benchmark -- Nifty -- remained range bound for most part of the day but witnessed a late surge in the last hours of the trade. After making a cautious start, market gained momentum, taking support from the Reserve Bank of India’s (RBI) report that it would infuse Rs 12,500 crore into the system through open market operations (OMOs) on March 14. Based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the RBI has decided to conduct purchase of the government securities under OMOs. But, market gave up most of their gains and traded flat on weak macro-economic data. The latest data from Central Statistics Office (CSO) showed that India’s Index of Industrial Production (IIP) slipped to 1.7% in January from 7.5% a year ago. Subdued performance of the manufacturing sector, especially capital and consumer goods, mainly pulled down the growth in industrial production.

Index witnessed some buying in the afternoon deals to continue firm trade, as traders found some support from with private report that foreign investments will continue to increase in the Indian market. It noted that there is nothing wrong with the economic outlook in India with inflationary pressure and the number of houses forecasting that the RBI will cut the repo rate a number of times this year, one should be sanguine about the economic outlook in India. The index extended its gaining monument in the last hour of the trade taking support from strengthening of rupee against the dollar. Meanwhile, the Goods and Services Tax Network (GSTN) has come up with a facility for businesses registered under GST to view and download a report on tax liability as declared in their form GSTR- 1 (final sales return) and as declared and paid in their return filed in form GSTR-3B (summary sales return).

Traders were seen piling up positions in PSU Bank, PVT Bank and Bank, while selling was witnessed in Media, Metal and Pharma. The top gainers from the F&O segment were Just Dial, BEML and IndusInd Bank. On the other hand, the top losers were Lupin, Steel Authority of India and Bharti Airtel. In the index option segment, maximum OI continues to be seen in the 11,300-11,700 calls and 10,800 -11,200 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 1.19% and reached 15.27. The 50-share Nifty was up by 40.50 points 0.36% to settle at 11,341.70.

Nifty March 2019 futures closed at 11366.65 on Wednesday, at a premium of 24.95 points over spot closing of 11341.70, while Nifty April 2019 futures ended at 11420.80 , at a premium of 79.10 points over spot closing. Nifty March futures saw an addition of 1.12 million (mn) units, taking the total outstanding open interest (OI) to 18.07 mn units. The near month derivatives contract will expire on March 28, 2019.

From the most active contracts, Yes Bank March 2019 futures traded at a premium of 1.35 points at 245.60 compared with spot closing of 244.25. The numbers of contracts traded were 45,682.

HDFC Bank March 2019 futures traded at a discount of 1.25 points at 2227.75 compared with spot closing of 2229.00. The numbers of contracts traded were 40,581.

Reliance Industries March 2019 futures traded at a premium of 1.65 points at 1350.65 compared with spot closing of 1349.00. The numbers of contracts traded were 30,683.

IndusInd Bank March 2019 futures traded at a discount of 3.30 points at 1633.60 compared with spot closing of 1636.90. The numbers of contracts traded were 29,786.

ICICI Bank March 2019 futures traded at a premium of 0.80 points at 391.95 compared with spot closing of 391.15. The numbers of contracts traded were 17,778.

Among Nifty calls, 11,300 SP from the March month expiry was the most active call with a contraction of 0.02 million open interests. Among Nifty puts, 11,300SP from the March month expiry was the most active put with an addition of 0.49 million open interests. The maximum OI outstanding for Calls was at 11,500 SP (2.50 mn) and that for Puts was at 11,000 SP (3.99mn). The respective Support and Resistance levels of Nifty are: Resistance 11,370.47 ---- Pivot Point 11,323.53 --- Support --- 11,294.77.

The Nifty Put Call Ratio (PCR) finally stood at 1.45 for March month contract. The top five scrips with highest PCR on OI were Bajaj Finserv (2.16), Larsen & Toubro (1.73), Bharat Petroleum Corporation (1.45), UltraTech Cement (1.39) and Ramco Cements (1.33).

Among most active underlying, Reliance Industries witnessed a contraction of 0.60 million units of Open Interest in the March month futures contract, followed by HDFC Bank witnessing an addition of 0.43 million units of Open Interest in the March month contract, Yes Bank witnessed an addition of 3.19 million units of Open Interest in the March month contract, ICICI Bank witnessed an addition of 1.34 million units of Open Interest in the March month contract and State Bank of India witnessed a contraction of 0.22 million units of Open Interest in the March month future contract.