Bulls rejoice post exit polls; Nifty jumps over 400 points

Exit polls forecasting BJP government to return to power, vaulted NSE gauge -- Nifty50 -- to end Monday’s trading session at a record closing high of over 11,800 mark. The barometer garnered over three and a half percent gains, driven by intense buying across Metal, Banking and Realty stock. The day began with huge gap on the positive side, taking encouragement from the Reserve Bank of India’s (RBI) data showing that the country's foreign exchange reserves rose by $1.368 billion to reach $420.055 billion in the week to May 10 on account of a rise in foreign currency assets. In the previous week, the reserves had increased by $171.9 million to $418.687 billion. Domestic sentiment was buoyed on report that the RBI's 'Payment Systems Vision 2021' document would act as a catalyst for promoting digital economy and instill confidence among the general public. Investors took note of report that the GST Council is likely to consider next month a proposal for setting up a national bench of the Appellate Authority for Advance Ruling (AAAR) to reconcile the contradictory orders on similar issues passed by AARs in different states, a move aimed at providing certainty to taxpayers.

Markets continued their bull run to reach at fresh intraday high points in last leg of trade, Traders remain energized with reports that the government is considering various options to adequately empower the RBI to deal with banks' stressed assets under the Insolvency and Bankruptcy Code following the Supreme Court order, quashing February 12 circular of the central bank. Buying further crept in with a report stated that Indian retail real estate sector attracted private equity investment worth $1.2 billion during 2017-18 calendar years, double from the previous two years. The consultant attributed the sharp rise in private equity (PE) inflow to further liberalisation in FDI policies such as 51 per cent FDI in multi-brand retail and 100 per cent FDI in single-brand retail under the automatic route.

All sectoral indices ended in green on NSE. The top gainers from the F&O segment were Adani Enterprises, Reliance Power and Adani Power. On the other hand, the top losers were Dr. Reddy's Laboratories, Zee Entertainment Enterprises and Balkrishna Industries. 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 15.67% and reached 23.67. The 50-share Nifty was up by 421.10 points or 3.69% to settle at 11,828.25.

Nifty May 2019 futures closed at 11859.45 on Monday, at a premium of 31.20 points over spot closing of 11828.25, while Nifty June 2019 futures ended at 11900.25, at a premium of 72.00 points over spot closing. Nifty May futures saw an addition of 1.06 million (mn) units, taking the total outstanding open interest (OI) to 17.09 mn units. The near month derivatives contract will expire on May 30, 2019.

From the most active contracts, Yes Bank May 2019 futures traded at a premium of 0.45 points at 144.15 compared with spot closing of 143.70. The numbers of contracts traded were 44,334.

ICICI Bank May 2019 futures traded at a discount of 0.10 points at 408.15 compared with spot closing of 408.25. The numbers of contracts traded were 42,401.

Reliance Industries May 2019 futures traded at a premium of 2.80 points at 1331.35 compared with spot closing of 1328.55. The numbers of contracts traded were 39,643.

State Bank of India May 2019 futures traded at a discount of 0.20 points at 345.60 compared with spot closing of 345.80. The numbers of contracts traded were 35,282.

Indiabulls Housing Finance May 2019 futures traded at a premium of 15.55 points at 815.55 compared with spot closing of 800.00. The numbers of contracts traded were 35,074.

Among Nifty calls, 12,000 SP from the May month expiry was the most active call with a contraction of 0.20 million open interests. Among Nifty puts, 11,500 from the May month expiry was the most active put with an addition of 0.36 million open interests. The maximum OI outstanding for Calls was at 12,000 SP (3.31mn) and that for Puts was at 11,000 SP (3.47 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,918.40 ---- Pivot Point 11,755.05 --- Support --- 11,664.90.

The Nifty Put Call Ratio (PCR) finally stood at 0.91 for May month contract. The top five scrips with highest PCR on OI were Shree Cement (4.00), Page India (2.25), Bosch (1.56), Petronet LNG (1.44) and Mindtree (1.37).

Among most active underlying, State Bank of India witnessed an addition of 7.06 million units of Open Interest in the May month futures contract, followed by Reliance Industries witnessing an addition of 1.00 million units of Open Interest in the May month contract, ICICI Bank witnessed an addition of 3.90 million units of Open Interest in the May month contract, HDFC Bank witnessed an addition of 1.53 million units of Open Interest in the May month contract and Axis Bank witnessed an addition of 1.73 million units of Open Interest in the May month future contract.