Indian equity benchmark -- Nifty -- continued its bullish trend for fifth straight day on Wednesday and closed the session in the positive zone. An exponential rise in Reliance Industries (RIL) stocks, a day after Reliance Jio announced its tariff plans, buoyed investors’ sentiments. However, caution prevailed ahead of derivatives expiry which will take place on Thursday as well as ahead of the release of minutes of the US Fed's Federal Open Market Committee (FOMC). Some support come with Union minister M Venkaiah Naidu’s statement that several views have been presented on demonetisation, it may have caused initial discomfort or loss to public but will reap benefits in longer run. He added that it is like a bitter pill for long term ill. Investors got some relief as Prime Minister Narendra Modi urged the United States to keep an open mind on admitting skilled Indian workers, in comments that pushed back against Republican President Donald Trump’s ‘America First’ rhetoric on jobs.
Traders were seen piling up positions in Banking, Realty and Auto stocks, while selling was witnessed in IT, Media and Metal stocks. The top gainers from the F&O segment were Reliance Industries, Just Dial and Idea Cellular. On the other hand, the top losers were Titan Company, Jaiprakash Associates and Page Industries. In the index option segment, maximum OI continues to be seen in the 8700-9200 calls and 8200-8900 puts indicating this is the trading range expectation.
The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 1.29% and reached 13.70. The 50-share Nifty was up by 19.05 points or 0.21% to settle at 8,926.90.
Nifty February 2017 futures closed at 8920.10 on Wednesday at a discount of 6.80 points over spot closing of 8926.90, while Nifty March 2017 futures ended at 8951.85, at a premium of 24.95 points over spot closing. Nifty February futures saw a contraction of 2.83 million (mn) units, taking the total outstanding open interest (OI) to 13.44 million (mn) units. The near month derivatives contract will expire on February 23, 2017.
From the most active contracts, Reliance Industries February 2017 futures traded at a discount of 4.95 points at 1204.85 compared with spot closing of 1,209.80. The numbers of contracts traded were 1,03,461.
Axis Bank February 2017 futures traded at a discount of 0.65 points at 523.55 compared with spot closing of 524.20. The numbers of contracts traded were 31,550.
HDFC Bank February 2017 futures traded at a discount of 4.85 points at 1398.95 compared with spot closing of 1403.80. The numbers of contracts traded were 23,527.
Tata Motors February 2017 futures traded at a premium of 0.30 points at 460.30 compared with spot closing of 460.00. The numbers of contracts traded were 19,802.
State Bank of India February 2017 futures traded at a premium of 0.35 points at 272.05 compared with spot closing of 271.70. The numbers of contracts traded were 19,144.
Among Nifty calls, 9000 SP from the February month expiry was the most active call with an addition of 1.72 million open interests. Among Nifty puts, 8900 SP from the February month expiry was the most active put with an addition of 0.84 million open interests. The maximum OI outstanding for Calls was at 9000 SP (7.13 mn) and that for Puts was at 8800 SP (4.78 mn). The respective Support and Resistance levels of Nifty are: Resistance 8956.68--- Pivot Point 8930.97--- Support --- 8901.18.
The Nifty Put Call Ratio (PCR) finally stood at 1.50 for February month contract. The top five scrips with highest PCR on OI were Colgate-Palmolive (India) (3.04), Oracle Financial Services Software (2.00), Pidilite Industries (1.91), TVS Motor (1.75) and Eicher Motors (1.54).
Among most active underlying, Reliance Industries witnessed a contraction of 5.93 million units of Open Interest in the February month futures contract, followed by Axis Bank witnessing a contraction of 5.58 million units of Open Interest in the February month contract, State Bank of India witnessed a contraction of 16.85 million units of Open Interest in the February month contract, Tata Motors witnessed a contraction of 5.68 million units of Open Interest in the February month future contract and ICICI Bank witnessed a contraction of 12.09 million units of Open Interest in the February month future contract.