Bulls back in action; Nifty surpasses 11,700 mark

NSE gauge -- Nifty50 -- gave powerful performance by surging over a percent on Wednesday, surpassing its psychological level of 11,700 amid sharp buying in frontline counters. The day began on a positive note, as traders took comfort with the Reserve Bank of India’s (RBI) statement that it will buy government securities worth Rs 25,000 crore next month through two auctions of Rs 12,500 crore each. Based on a review of the evolving liquidity conditions and assessment of the durable liquidity needs going forward, RBI has decided to conduct purchase of government securities under (OMOs). Traders also took note of a report that the Ministry of Corporate Affairs plans to start gathering 'primary data' from persons who have put in their money in chit funds and deposit-taking schemes, amid continuing efforts to clamp down on illicit fundraising activities.

As the day progressed, the gauge added gains and surged to day’s high in late afternoon deals, as market participants took encouragement with a private report that the US’ decision to end the Iran oil sanctions waiver will not affect India’s investments in Chabahar port in Iran. The revocation of the ‘significant reductions exemption’(SRE) which allowed eight countries, including India, to continue to source Iranian oil for the past six months ends on May 2, following which the US expects oil imports from Iran to go down to zero. Investors took note of a report that around 3.10 crore small farmers have so far received the first tranche of Rs 2,000 each under the PM-Kisan scheme and 2.10 crore peasants have got the second installment as well, costing Rs 10,500 crore to the exchequer.

All sectoral indices ended in green on NSE except Auto. The top gainers from the F&O segment were Reliance Capital, Infibeam Avenues and CG Power and Industrial Solutions. On the other hand, the top losers were Hexaware Technologies, ACC and Tata Motors. In the index option segment, maximum OI continues to be seen in the 11,600-12,000 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 decreased by 3.78% and reached 23.71. The 50-share Nifty was up by 150.20 points 1.30% to settle at 11,726.15.

Nifty April 2019 futures closed at 11738.25 on Wednesday, at a premium of 12.10 points over spot closing of 11726.15, while Nifty May 2019 futures ended at 11826.95, at a premium of 100.80 points over spot closing. Nifty April futures saw a contraction of 2.10 million (mn) units, taking the total outstanding open interest (OI) to 9.14 mn units. The near month derivatives contract will expire on April 25, 2019.

From the most active contracts, Yes Bank April 2019 futures traded at a premium of 0.50 points at 239.05 compared with spot closing of 238.55. The numbers of contracts traded were 56,303.

Reliance Industries April 2019 futures traded at a premium of 1.45 points at 1390.95 compared with spot closing of 1389.50. The numbers of contracts traded were 43,310.

Tata Motors April 2019 futures traded at a discount of 0.05 points at 224.20 compared with spot closing of 224.25. The numbers of contracts traded were 42,755.

HDFC Bank April 2019 futures traded at a premium of 2.60 points at 2283.55 compared with spot closing of 2280.95. The numbers of contracts traded were 35,413.

Tata Consultancy Services April 2019 futures traded at a premium of 18.20 points at 2186.80 compared with spot closing of 2168.60. The numbers of contracts traded were 25,450.

Among Nifty calls, 11,700 SP from the April month expiry was the most active call with a contraction of 3.58 million open interests. Among Nifty puts, 11,600 from the April month expiry was the most active put with a contraction of 0.67 million open interests. The maximum OI outstanding for Calls was at 11,800 SP (2.71mn) and that for Puts was at 11,500 SP (2.74 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,785.05 ---- Pivot Point 11,681.95 --- Support --- 11,623.05.

The Nifty Put Call Ratio (PCR) finally stood at 1.34 for April month contract. The top five scrips with highest PCR on OI were Shree Cement (3.00), TCS (1.50), Bosch (1.30), Bajaj Finserv (1.23) and Bajaj Auto (1.14).

Among most active underlying, Reliance Industries witnessed a contraction of 8.27 million units of Open Interest in the April month futures contract, followed by Tata Motors witnessing a contraction of 20.32 million units of Open Interest in the April month contract, State Bank of India witnessed a contraction of 17.26 million units of Open Interest in the April month contract, ICICI Bank witnessed a contraction of 17.25 million units of Open Interest in the April month contract and UltraTech Cement witnessed a contraction of 0.41 million units of Open Interest in the April month future contract.