Nifty exhibits decent gain; surpasses 11,700 mark

S&P CNX Nifty exhibited a decent pull-back in Wednesday’s trade after a steep fall on yesterday, ending with a quarter percent gain. Market made a slightly positive start, as traders took some support with the Organisation for Economic Co-operation and Development (OECD) in its Economic Outlook stating that India’s economic growth will regain strength and approach 7.5% by 2020 buoyed by rural consumption and subdued inflation. It added that this growth will come from higher domestic demand due to improved financial conditions, fiscal and quasi-fiscal stimulus, including new income support measures for rural farmers, and recent structural reforms. Sentiment on the street improved with a private report that land and labour reforms, privatisation and export promotion would be at the top of agenda of the new government irrespective of which party or coalition takes charge after the poll results on May 23.

The index continued the gaining monument in the afternoon session, taking support with United Nations’ (UN) report which stated that the India's economy is projected to grow at 7.1% in current financial year (FY20) on the back of strong domestic consumption and investment. It projected the economy will grow 7% in last financial year (FY19). Market gave up major gains in last leg of the session and came off its intraday high points, as traders remained on sidelines ahead of final results of the 2019 Lok Sabha elections to be declared on May 23.

All sectoral indices ended in green on NSE except FMCG, IT and Media. The top gainers from the F&O segment were Reliance Power, Allahabad Bank and Bharat Financial Inclusion. On the other hand, the top losers were Dewan Housing Finance Corporation, Jindal Steel & Power and Bosch. 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 increased by 7.72% and reached 27.63. The 50-share Nifty was up by 28.80 points or 0.25% to settle at 11,737.90.

Nifty May 2019 futures closed at 11781.65 on Wednesday, at a premium of 43.75 points over spot closing of 11737.90, while Nifty June 2019 futures ended at 11822.70, at a premium of 84.80 points over spot closing. Nifty May futures saw an addition of 0.98 million (mn) units, taking the total outstanding open interest (OI) to 17.66 mn units. The near month derivatives contract will expire on May 30, 2019.

From the most active contracts, IndusInd Bank May 2019 futures traded at a discount of 2.65 points at 1525.35 compared with spot closing of 1528.00. The numbers of contracts traded were 91,179.

Reliance Industries May 2019 futures traded at a premium of 1.45 points at 1345.45 compared with spot closing of 1344.00. The numbers of contracts traded were 35,811.

Yes Bank May 2019 futures traded at a discount of 0.85 points at 138.05 compared with spot closing of 138.90. The numbers of contracts traded were 31,557.

Dewan Housing Finance Corporation May 2019 futures traded at a discount of 0.35 points at 116.90 compared with spot closing of 117.25. The numbers of contracts traded were 26,109.

ICICI Bank May 2019 futures traded at a premium of 0.80 points at 406.20 compared with spot closing of 405.40. The numbers of contracts traded were 23,936.

Among Nifty calls, 12,000 SP from the May month expiry was the most active call with an addition of 0.17 million open interests. Among Nifty puts, 11,500 from the May month expiry was the most active put with an addition of 0.33 million open interests. The maximum OI outstanding for Calls was at 12,000 SP (3.78mn) and that for Puts was at 11,000 SP (3.92 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,787.67 ---- Pivot Point 11,735.03 --- Support --- 11,685.27.

The Nifty Put Call Ratio (PCR) finally stood at 0.86 for May month contract. The top five scrips with highest PCR on OI were Shree Cement (4.00), Page India (2.25), Bosch (1.39), Petronet LNG (1.32) and SRF (1.25).

Among most active underlying, IndusInd Bank witnessed an addition of 0.67 million units of Open Interest in the May month futures contract, followed by Reliance Industries witnessing a contraction of 0.98 million units of Open Interest in the May month contract, State Bank of India witnessed an addition of 0.37 million units of Open Interest in the May month contract, ICICI Bank witnessed a contraction of 2.53 million units of Open Interest in the May month contract and HDFC Bank witnessed an addition of 0.44 million units of Open Interest in the May month future contract.