NSE gauge--Nifty--ended the day’s trade with gains of around half a percent. Key index started the day on optimistic note, as traders took support with a report that the Department for Promotion of Industry and Internal Trade (DPIIT) has kick started an exercise to relax India’s foreign direct investment (FDI) norms. The department held an inter-ministerial meeting to discuss further opening up in sectors, especially where 100% FDI is not allowed on the automatic route. Sentiments remained positive, aided with Prime Minister Narendra Modi’s statement that he has invited Saudi companies to invest in India’s energy space saying that the government has set a target of $100 billion investment in the sector. He added India offers a huge investment opportunity in the infrastructure sector also as he emphasized that the country aims to be a $5 trillion economy in the next five years.
Index held uptrend in second half of the trade, amid reports that the finance ministry and regulators are reviewing the possibility of scrapping the dividend distribution tax (DDT). It is also considering rationalisation of the long-term capital gains (LTCG) taxation structure by classifying three asset classes against six at present. Traders overlooked rating agency ICRA’s report that domestic demand for the mining and construction equipment sector fell sharply by 16-17 percent in the January-August period of calendar year 2019 (CY19), on the back of tight liquidity conditions in the market, delayed payment to contractors along with reduction in the government expenditure in infrastructure projects.
Traders were seen piling up positions in Bank, FMGC and IT, while selling was witnessed in Auto, Media and Metal. The top gainers from the F&O segment were Bharat Heavy Electricals, InterGlobe Aviation and GAIL (India). On the other hand, the top losers were Bharti Infratel, Yes Bank and Dish TV India. In the index option segment, maximum OI continues to be seen in the 11800- 12,300 calls and 11,500 -12,000 puts indicating this is the trading range expectation.
India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 1.45% and reached 16.65.The 50 share Nifty was up by 57.25 points or 0.49% to settle at 11,844.10.
Nifty October 2019 futures closed at 11853.90 (LTP) on Wednesday, at a premium of 9.80 points over spot closing of 11844.10, while Nifty November 2019 futures ended at 11900.05 (LTP), at a premium of 55.95 points over spot closing. Nifty October futures saw a contraction of 0.28 million (mn) units, taking the total outstanding open interest (OI) to 11.63 mn units. The near month derivatives contract will expire on October 31, 2019 (Provisional).
From the most active contracts, Yes Bank October 2019 futures traded at a discount of 0.05 points at 56.00 (LTP) compared with spot closing of 56.05. The numbers of contracts traded were 72,554 (Provisional).
Reliance Industries October 2019 futures traded at a discount of 2.55 points at 1480.05 (LTP) compared with spot closing of 1482.60. The numbers of contracts traded were 48,611 (Provisional).
Tata Consultancy Services October 2019 futures traded at a discount of 4.00 points at 2254.00 (LTP) compared with spot closing of 2258.00. The numbers of contracts traded were 40,845 (Provisional).
Indiabulls Housing Finance October 2019 futures traded at a premium of 0.40 points at 214.15 (LTP) compared with spot closing of 213.75. The numbers of contracts traded were 36,768 (Provisional).
ICICI Bank October 2019 futures traded at a premium of 0.20 points at 470.85 (LTP) compared with spot closing of 470.65. The numbers of contracts traded were 34,809 (Provisional).
Among, Nifty calls, 11,900 SP from the October month expiry was the most active call with an addition of 0.32 million open interests. Among Nifty puts, 11,800 from the October month expiry was the most active put with an addition of 1.47 million open interests. The maximum OI outstanding for Calls was at 12000 SP (3.29 mn) and that for Puts was at 11,800 SP (2.98 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,890.55 -- Pivot Point 11,837.50 -- Support -- 11,791.05.
The Nifty Put Call Ratio (PCR) finally stood at 1.32 for October month contract. The top five scrips with highest PCR on Bosch (5.38), Eicher Motors (1.76), ICICI Bank (1.74), Hindustan Unilever (1.58) and Berger Paints India (1.55).
Among most active underlying, State Bank of India witnessed an addition of 9.14 million units of Open Interest in the October month futures contract, followed by Reliance Industries witnessing an addition of 10.71 million units of Open Interest in the October month contract, Infosys witnessed an addition of 11.29 million units of Open Interest in the October month contract, Tata Consultancy Services witnessed an addition of 6.08 million units of Open Interest in the October month contract and Housing Development Finance Corporation witnessed an addition of 7.05 million units of Open Interest in the October month future contract (Provisional).
