Nifty ends higher; tops 11,900 mark

Key equity benchmark -- Nifty -- ended higher but off day's high on first day of the trading week with Nifty finished above 11,900 mark. Index witnessed a gap-up start to Monday's session, as traders took some encouragement with report that foreign investors have pumped in a net amount of Rs 7,095 crore into the Indian capital markets during the first week of June in anticipation of continued policy reforms. Traders remained encouraged with Trade Promotion Council of India’s (TPCI) statement that the government should take six concrete steps such as reducing cost and time of port clearance for goods and enhancing availability of credit with a view to boost exports. Market participants took note of report that India pitched for promoting micro, small and medium enterprises (MSMEs) in developing countries as they are important for employment and income generation.

Market gave up major gains in afternoon session and came off its intraday high points, as investors got anxious with India Meteorological Department’s (IMD) data which showed that a delay in the arrival of monsoon has pushed the country’s rainfall deficiency in the first nine days of June to 45%. Monsoon made an onset over Kerala on June 8, a week after its normal arrival date. Market recouped traction in the last leg of trade to end higher, as positivism remained among traders with the RBI Governor Shaktikanta Das’ statement that the revised guidelines to deal with stressed assets will sustain improvement in credit culture that have been ushered in by the efforts of the Government and the Reserve Bank so far and will go a long way in promoting a strong and resilient financial system in India.

Traders were seen piling up positions in IT, FMCG and Pharma stocks, while selling was witnessed in Media, PSU Bank and Pvt Bank. The top gainers from the F&O segment were Dewan Housing Finance Corporation, Muthoot Finance and Mahanagar Gas. On the other hand, the top losers were Jain Irrigation Systems, PC Jeweller 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 increased by 0.79% and reached 14.97. The 50-share Nifty was up by 52.05 points or 0.44% to settle at 11,922.70.

Nifty June 2019 futures closed at 11933.80 on Monday, at a premium of 11.10 points over spot closing of 11922.70, while Nifty July 2019 futures ended at 11970.80, at a premium of 48.10 points over spot closing. Nifty June futures saw a contraction of 0.07 million (mn) units, taking the total outstanding open interest (OI) to 18.48 mn units. The near month derivatives contract will expire on June 27, 2019.

From the most active contracts, Yes Bank June 2019 futures traded at a discount of 0.30 points at 136.20 compared with spot closing of 136.50. The numbers of contracts traded were 50,742.

Reliance Infrastructure June 2019 futures traded at a discount of 0.90 points at 63.30 compared with spot closing of 64.20. The numbers of contracts traded were 28,858.

Reliance Capital June 2019 futures traded at a discount of 9.65 points at 82.55 compared with spot closing of 92.20. The numbers of contracts traded were 26,980.

State Bank of India June 2019 futures traded at a premium of 0.05 points at 345.00 compared with spot closing of 344.95. The numbers of contracts traded were 21,375.

Reliance Industries June 2019 futures traded at a premium of 0.15 points at 1320.65 compared with spot closing of 1320.50. The numbers of contracts traded were 20,627.

Among Nifty calls, 12,000 SP from the June month expiry was the most active call with an addition of 0.06 million open interests. Among Nifty puts, 11,900 from the June month expiry was the most active put with a contraction of 0.04 million open interests. The maximum OI outstanding for Calls was at 12,500 SP (2.71 mn) and that for Puts was at 11,500 SP (2.90 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,974.58 ---- Pivot Point 11,923.17 --- Support --- 11,871.28.

The Nifty Put Call Ratio (PCR) finally stood at 1.28 for June month contract. The top five scrips with highest PCR on OI were MRPL (2.97), Colgate-Palmolive (1.99), Bosch (1.67), TCS (1.50) and Birlasoft (1.40).

Among most active underlying, State Bank of India witnessed a contraction of 0.39 million units of Open Interest in the June month futures contract, followed by Reliance Industries witnessing a contraction of 0.11 million units of Open Interest in the June month contract, Yes Bank witnessed a contraction of 0.44 million units of Open Interest in the June month contract, ICICI Bank witnessed a contraction of 3.09 million units of Open Interest in the June month contract and Tata Consultancy Services witnessed an addition of 0.007 million units of Open Interest in the June month future contract.