Nifty bounces back to end at record closing high

The domestic 50-share index--Nifty--bounced back to end at record closing high on Thursday, garnering gains of over half a percent, as investors resumed buying. Market made a slightly positive start, as traders took some support with a report that the Department for Promotion of Industry and Internal Trade (DPIIT) has proposed to formulate a national retail policy to support growth of domestic trade. A national retail policy will be formulated to support development of the sector that would benefit 65 million small traders. Sentiments got boost after the report that the Reserve Bank of India (RBI) extended minimum holding period requirement for Non-banking financial companies (NBFCs) to raise funds via loan securitisation to help the sector overcome liquidity shortage. NBFCs have been permitted to securitise loans of over five-year maturity after holding them for six months on their books.

In the afternoon deals, the index held gaining monument, taking support from the data showing that investments in the domestic capital market through participatory notes, led by equity allocation, rose to Rs 81,220 crore at the end of April on hopes of favorable market conditions. Out of the total investments made till April-end, Rs 58,820 crore was invested in the equities segment, Rs 21,542 crore in debt and Rs 123 crore in derivatives market. Traders remained encouraged with report that the commerce and industry ministry is gearing up to boost exports through e-commerce at a time when the government is expected to reframe the proposed e-commerce policy, yet again.

Traders were seen piling up positions in Financial service, IT and Bank, while selling was witnessed in Auto, Metal and Pharma. The top gainers from the F&O segment were Just Dial, Adani Power and Infibeam Avenues. On the other hand, the top losers were PC Jeweller, Reliance Power and Reliance Infrastructure. In the index option segment, maximum OI continues to be seen in the 12,400-12,600 calls and 11,200-11,700 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 4.86% and reached 15.61. The 50-share Nifty was up by 84.80 points or 0.71% to settle at 11,945.90.

Nifty June 2019 futures closed at 11976.70 on Thursday, at a premium of 30.80 points over spot closing of 11945.90, while Nifty July 2019 futures ended at 12011.65, at a premium of 65.75 points over spot closing. Nifty June futures saw an addition of 5.32 million (mn) units, taking the total outstanding open interest (OI) to 18.79 mn units. The near month derivatives contract will expire on June 27, 2019.

From the most active contracts, Reliance Industries June 2019 futures traded at a premium of 5.70 points at 1335.70 compared with spot closing of 1330.00. The numbers of contracts traded were 35,464.

ICICI Bank June 2019 futures traded at a discount of 0.35 points at 427.60 compared with spot closing of 427.95. The numbers of contracts traded were 30,728.

Yes Bank June 2019 futures traded at a discount of 1.70 points at 153.55 compared with spot closing of 155.25. The numbers of contracts traded were 30,248.

HDFC Bank June 2019 futures traded at a discount of 1.95 points at 2438.05 compared with spot closing of 2440.00. The numbers of contracts traded were 27,391.

Housing Development Finance Corporation June 2019 futures traded at a premium of 17.65 points at 2196.75 compared with spot closing of 2179.10. The numbers of contracts traded were 18,449.

Among Nifty calls, 12,000 SP from the June month expiry was the most active call with an addition of 0.10 million open interests. Among Nifty puts, 11,900 from the June month expiry was the most active put with an addition of 0.34 million open interests. The maximum OI outstanding for Calls was at 12,500 SP (1.54 mn) and that for Puts was at 11,500 SP (2.30 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,989.83 ---- Pivot Point 11,924.62 --- Support --- 11,880.68.

The Nifty Put Call Ratio (PCR) finally stood at 1.49 for June month contract. The top five scrips with highest PCR on OI were Bosch (5.50), Berger Paints (3.00), TCS (1.89), Birlasoft (1.74) and Tata Motors -- DVR (1.42).

Among most active underlying, Reliance Industries witnessed an addition of 7.63 million units of Open Interest in the June month futures contract, followed by State Bank of India witnessing an addition of 17.24 million units of Open Interest in the June month contract, ICICI Bank witnessed an addition of 14.39 million units of Open Interest in the June month contract, Housing Development Finance Corporation witnessed an addition of 6.19 million units of Open Interest in the June month contract and HDFC Bank witnessed an addition of 2.71 million units of Open Interest in the June month future contract.