Nifty continues northward journey for fourth straight session

Nifty extended its winning streak for fourth straight session and showcased a powerful performance by surging around a percent on Tuesday, surpassing its psychological level of 11,750 amid strong foreign fund inflows and positive global cues. It was a positive start to the markets, as traders took encouragement with the Meteorological Department stating that India is likely to receive average monsoon rains this year. The forecast raised expectations of higher farm income. The markets took support with the government data showing that India's exports grew by 11% to $32.55 billion in March on account of higher growth in sectors including pharma, chemicals and engineering. Imports rose by 1.44% to $43.44 billion during the month. The market breadth remained optimistic with a report that the government’s war on Non-Performing Assets (NPAs) could give a boost of 60 basis points to India’s GDP in FY20. The measures taken by the Modi government including recovery of bad loans and bank recapitalisation will reduce costs for lenders.

Index continued to maintain its positive momentum in the afternoon session, taking support from a private report stating that the Reserve Bank of India will cut its key policy rates by another 25 basis points, after Governor Shaktikanta Das' weekend speech focusing on ways to revive growth. Some comfort also came with, the government is targeting public procurement worth Rs 50,000 crore through the commerce ministry's online marketplace--Government e-Marketplace (GeM)--during the current financial year (2019-20). In FY19, GeM touched Rs 17,325 crore mark in terms of value of transactions as compared to Rs 5,885 crore in the previous financial year and Rs 422 crore in 2016-17.

All sectoral indices ended in green on NSE except PSU Bank, Realty and IT. The top gainers from the F&O segment were PC Jeweller, InterGlobe Aviation and Vodafone Idea. On the other hand, the top losers were Jet Airways, Reliance Capital and Allahabad Bank. In the index option segment, maximum OI continues to be seen in the 11,800-12,200 calls and 11,300-11,700 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 1.43% and reached 21.69. The 50-share Nifty was up by 96.80 points 0.83% to settle at 11,787.15.

Nifty April 2019 futures closed at 11824.45 on Tuesday, at a premium of 37.30 points over spot closing of 11787.15, while Nifty May 2019 futures ended at 11890.95, at a premium of 103.80 points over spot closing. Nifty April futures saw an addition of 0.19 million (mn) units, taking the total outstanding open interest (OI) to 15.68 mn units. The near month derivatives contract will expire on April 25, 2019.

From the most active contracts, Reliance Industries April 2019 futures traded at a premium of 5.80 points at 1350.80 compared with spot closing of 1345.00. The numbers of contracts traded were 29,316.

ICICI Bank April 2019 futures traded at a discount of 0.45 points at 407.50 compared with spot closing of 407.95. The numbers of contracts traded were 26,418.

Tata Motors April 2019 futures traded at a premium of 1.05 points at 231.50 compared with spot closing of 230.45. The numbers of contracts traded were 25,409.

InterGlobe Aviation April 2019 futures traded at a discount of 0.10 points at 1579.55 compared with spot closing of 1579.65. The numbers of contracts traded were 24,594.

Coal India April 2019 futures traded at a discount of 0.80 points at 249.20 compared with spot closing of 250.00. The numbers of contracts traded were 21,244.

Among Nifty calls, 11,800 SP from the April month expiry was the most active call with a contraction of 0.27 million open interests. Among Nifty puts, 11,700 from the April month expiry was the most active put with an addition of 0.58 million open interests. The maximum OI outstanding for Calls was at 12,000 SP (2.48mn) and that for Puts was at 11,500 SP (2.88mn). The respective Support and Resistance levels of Nifty are: Resistance 11,821.55 ---- Pivot Point 11,776.55 --- Support --- 11,742.15.

The Nifty Put Call Ratio (PCR) finally stood at 1.46 for April month contract. The top five scrips with highest PCR on OI were Shree Cement (1.50), Bosch (1.31), Maruti Suzuki (1.19) Bajaj Finserv (1.17) and ICICI Prudential Life Insurance (1.13).

Among most active underlying, ICICI Bank witnessed a contraction of 1.03 million units of Open Interest in the April month futures contract, followed by Reliance Industries witnessing an addition of 0.73 million units of Open Interest in the April month contract, Tata Consultancy Services witnessed a contraction of 0.34 million units of Open Interest in the April month contract, InterGlobe Aviation witnessed a contraction of 0.01 million units of Open Interest in the April month contract and Infosys witnessed a contraction of 0.91 million units of Open Interest in the April month future contract.