The local benchmark -- Nifty -- closed range-bound session on a flat note, as the Reserve Bank of India ( RBI) kept policy rates steady, dashing hopes of some investors who were expecting a 25 bps repo rate cut amid falling inflation and the government's resolve to adhere to fiscal prudence in the Budget. The central bank decided to change the stance from accommodative to neutral and kept the short-term lending rate, called repo rate, unchanged at 6.25%, opting to wait for more clarity on the trend for inflation. However, some fag-end buying in banking and other stocks helped the Nifty to end marginally in green. Traders took some encouragement from Economic Affairs Secretary Shaktikanta Das’s statement that 3.2% fiscal deficit target is realistic and there is possibility that revenues will exceed the target as Budget has not taken into account the demonetisation windfall. Further, sentiments remained optimistic with a private report stating that the global economic order is expected to shift from advanced to emerging economies over the next few decades and by 2040 India could edge past the US to become the world's second largest economy in purchasing power parity (PPP) terms.
Traders were seen piling up positions in Media, Metal and Realty stocks, while selling was witnessed in FMCG, Financial Services and Banking stocks. The top gainers from the F&O segment were Jaiprakash Associates, Titan Company and Engineers India. On the other hand, the top losers were Wockhardt, Siemens and NHPC. In the index option segment, maximum OI continues to be seen in the 8700-9200 calls and 8000-8800 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 1.16% and reached 13.35. The 50-share Nifty was up by 0.75 points or 0.01% to settle at 8,769.05.
Nifty February 2017 futures closed at 8796.35 on Wednesday at a premium of 27.30 points over spot closing of 8769.05, while Nifty March 2017 futures ended at 8828.30, at a premium of 59.25 points over spot closing. Nifty February futures saw an addition of 0.19 million (mn) units, taking the total outstanding open interest (OI) to 21.76 million (mn) units. The near month derivatives contract will expire on February 23, 2017.
From the most active contracts Tata Steel February 2017 futures traded at a premium of 3.95 points at 471.95 compared with spot closing of 468.00. The numbers of contracts traded were 20,034.
Bharat Forge February 2017 futures traded at a discount of 2.75 points at 966.75 compared with spot closing of 969.50. The numbers of contracts traded were 14,743.
State Bank of India February 2017 futures traded at a discount of 0.65 points at 278.05 compared with spot closing of 278.70. The numbers of contracts traded were 14,544.
Titan Company February 2017 futures traded at a premium of 4.45 points at 427.05 compared with spot closing of 422.60. The numbers of contracts traded were 14,153.
Bharat Heavy Electricals February 2017 futures traded at a discount of 1.25 points at 155.55 compared with spot closing of 156.80. The numbers of contracts traded were 14,035.
Among Nifty calls, 8800 SP from the February month expiry was the most active call with an addition of 0.10 million open interests. Among Nifty puts, 8700 SP from the February month expiry was the most active put with an addition of 0.42 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.25 mn) and that for Puts was at 8500 SP (6.26 mn). The respective Support and Resistance levels of Nifty are: Resistance 8801.87--- Pivot Point 8758.43--- Support --- 8725.62.
The Nifty Put Call Ratio (PCR) finally stood at 1.17 for February month contract. The top five scrips with highest PCR on OI were Sun TV Network (2.23), Oracle Financial Services Software (2.00), Bharti Airtel (1.25), Maruti Suzuki India (1.22) and IDEA (1.10).
Among most active underlying, Tata Steel witnessed an addition of 1.36 million units of Open Interest in the February month futures contract, followed by Punjab National Bank witnessing an addition of 1.25 million units of Open Interest in the February month contract, State Bank of India witnessed an addition of 6.00 thousand units of Open Interest in the February month contract, Bharat Heavy Electricals witnessed a contraction of 1.77 million units of Open Interest in the February month future contract and ICICI Bank witnessed an addition of 0.41 million units of Open Interest in the February month future contract.