After trading in negative territory for most of the day, the local benchmark Nifty managed to close last trading session of the week with modest gains. Global credit rating agency, Moody’s statement that the Budget provides modest economic support to low-income households, benefits for the infrastructure sector with a boost in public spending and is generally supportive for business with its lower tax rates for micro enterprises and MSMEs, remained supportive to uplift sentiments. Agency further said that the merger of the previously separate Railway Budget and Union Budget and removal of the designation of Plan and non-Plan spending should improve Budget transparency and support the effectiveness of spending and revenue planning moving forward. Sentiments also got support with Prime Minister Narendra Modi’s statement that Budget 2017-18 aims at giving wings to 125 crore Indians and fulfilling their development aspirations. The aim is all-round and all-inclusive growth, impacting every section of the society positively. However upside remained capped with the report that India’s services languished, with new business orders falling for the third straight month, amid muted inflationary pressure that could offer RBI much room to remain accommodative in its next policy meet next week. The Nikkei India Services Purchasing Managers’ Index (PMI), which tracks services sector companies on a monthly basis, came in at 48.7 in January, from 46.8 in December 2016. A reading above 50 indicates expansion while any score below the mark denotes contraction.
Traders were seen piling up positions in PSU, Media and Pharma stocks, while selling was witnessed in Auto, Metal and FMCG stocks. The top gainers from the F&O segment were Sun TV Network, Granules India and Union Bank of India. On the other hand, the top losers were Vedanta, Cairn India and Titan Company. In the index option segment, maximum OI continues to be seen in the 8600-9100 calls and 8000-8700 puts indicating this is the trading range expectation.
The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 2.90% and reached 13.12. The 50-share Nifty was up by 6.70 points or 0.08% to settle at 8,740.95.
Nifty February 2017 futures closed at 8754.35 on Friday at a premium of 13.40 points over spot closing of 8740.95, while Nifty March 2017 futures ended at 8780.50, at a premium of 39.55 points over spot closing. Nifty February futures saw a contraction of 0.17 million (mn) units, taking the total outstanding open interest (OI) to 21.48 million (mn) units. The near month derivatives contract will expire on February 23, 2017.
From the most active contracts Sun TV Network February 2017 futures traded at a discount of 6.50 points at 678.70 compared with spot closing of 685.20. The numbers of contracts traded were 36,043.
Infosys February 2017 futures traded at a premium of 2.80 points at 936.85 compared with spot closing 934.05. The numbers of contracts traded were 18,639.
Strides Shasun February 2017 futures traded at a premium of 6.30 points at 1200.25 compared with spot closing of 1,193.95. The numbers of contracts traded were 18,298.
State Bank of India February 2017 futures traded at a premium of 0.15 points at 278.25 compared with spot closing of 278.10. The numbers of contracts traded were 15,853.
Bank of Baroda February 2017 futures traded at a premium of 0.55 points at 186.60 compared with spot closing of 186.05. The numbers of contracts traded were 13,762.
Among Nifty calls, 8800 SP from the February month expiry was the most active call with an addition of 0.14 million open interests. Among Nifty puts, 8700 SP from the February month expiry was the most active put with an addition of 0.65 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.18 mn) and that for Puts was at 8500 SP (5.30 mn). The respective Support and Resistance levels of Nifty are: Resistance 8756.88--- Pivot Point 8732.32--- Support --- 8716.38.
The Nifty Put Call Ratio (PCR) finally stood at 1.10 for February month contract. The top five scrips with highest PCR on OI were Torrent Pharmaceuticals (2.90), Sun TV Network (2.11), Oracle Financial Services Software (2.00), Bharti Airtel(1.31) and Maruti Suzuki India (1.23).
Among most active underlying, Sun TV Network witnessed a contraction of 0.68 million units of Open Interest in the February month futures contract, followed by State Bank of India witnessing a contraction of 0.31 million units of Open Interest in the February month contract, Punjab National Bank witnessed an addition of 0.16 million units of Open Interest in the February month contract, Tata Steel witnessed a contraction of 0.08 million units of Open Interest in the February month future contract and ICICI Bank witnessed an addition of 1.48 million units of Open Interest in the February month future contract.