Nifty settles above 11,200 mark

Nifty ended Tuesday’s trade in green terrain despite making negative start, as traders opted to buy beaten down but fundamentally strong stocks. Market made a cautious start with Central Statistics Office (CSO) data showing that retail inflation inched up to a six-month high of 2.92% in April due to a spike in food prices, including vegetables, meat, fish and eggs. Inflation based on the Consumer Price Index (CPI) was at 2.86% in the previous month and 4.58% in April 2018. Market traded choppy for most part of the session with Moody's Investors Service’s statement that India’s rising oil consumption will support its investments in refining capacity additions and upstream production, but imports will keep growing amid stagnant production. The country's dependence on imported crude oil to meet its needs has risen to 83.7% in 2018-19 fiscal year from 82.9% in 2017-18. Import dependence was 80.6% in 2015-16.

However, buying which crept in last leg of trade helped market to end in green terrain as traders turned optimistic with data showing that wholesale price inflation (WPI) for the month of April eased to 3.07 percent compared to 3.18 percent in March led by fall in prices of manufacturing products. Traders also took some support with Chief Economic Advisor (CEA) Krishnamurthy V. Subramanian’s statement that the Indian economy will grow at 7% range in the current fiscal powered by the effects of the strong structural reforms such as bankruptcy laws, Goods and Services Tax (GST), crackdown on shell companies and the fiscal prudence undertaken in the last five years. Though, market trimmed some of its gain in dying hour of trade due to volatility.

All sectoral indices ended in green on NSE except IT. The top gainers from the F&O segment were IRB Infrastructure Developers, Manappuram Finance and Bharat Heavy Electricals. On the other hand, the top losers were Jet Airways, Steel Authority of India and PC Jeweller. In the index option segment, maximum OI continues to be seen in the 11,900-12,100 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 decreased by 0.91% and reached 27.13. The 50-share Nifty was up by 73.85 points or 0.66% to settle at 11,222.05.

Nifty May 2019 futures closed at 11241.65 on Tuesday, at a premium of 19.60 points over spot closing of 11222.05, while Nifty June 2019 futures ended at 11291.85, at a premium of 69.80 points over spot closing. Nifty May futures saw a contraction of 0.77 million (mn) units, taking the total outstanding open interest (OI) to 16.22 mn units. The near month derivatives contract will expire on May 30, 2019.

From the most active contracts, Reliance Industries May 2019 futures traded at a discount of 2.60 points at 1264.40 compared with spot closing of 1267.00. The numbers of contracts traded were 42,803.

Yes Bank May 2019 futures traded at a discount of 0.70 points at 156.25 compared with spot closing of 156.95. The numbers of contracts traded were 28,064.

State Bank of India May 2019 futures traded at a discount of 0.65 points at 315.35 compared with spot closing of 316.00. The numbers of contracts traded were 26,904.

ICICI Bank May 2019 futures traded at a premium of 0.75 points at 382.25 compared with spot closing of 381.50. The numbers of contracts traded were 25,648.

Tata Steel May 2019 futures traded at a premium of 1.45 points at 471.95 compared with spot closing of 470.50. The numbers of contracts traded were 24,183.

Among Nifty calls, 11,300 SP from the May month expiry was the most active call with an addition of 0.15 million open interests. Among Nifty puts, 11,100 from the May month expiry was the most active put with an addition of 0.04 million open interests. The maximum OI outstanding for Calls was at 12,000 SP (2.67 mn) and that for Puts was at 11,000 SP (2.63 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,308.43 ---- Pivot Point 11,208.37 --- Support --- 11,121.98.

The Nifty Put Call Ratio (PCR) finally stood at 1.03 for May month contract. The top five scrips with highest PCR on OI were Mindtree (1.72), Bosch (1.48), SRF (1.36), Page India (1.25) and NIIT Technologies (1.25).

Among most active underlying, Reliance Industries witnessed an addition of 0.03 million units of Open Interest in the May month futures contract, followed by State Bank of India witnessing a contraction of 0.60 million units of Open Interest in the May month contract, ICICI Bank witnessed an addition of 0.33 million units of Open Interest in the May month contract, Tata Steel witnessed an addition of 3.07 million units of Open Interest in the May month contract and Housing Development Finance Corporation witnessed an addition of 0.12 million units of Open Interest in the May month future contract.