Indian equity benchmark -- Nifty -- carried forward the winning momentum to the second session and ended higher on Wednesday on account of short-covering ahead of F&O expiry tomorrow. Sentiments also aided by the report that the much-awaited GST Bill discussion started in the Lok Sabha. Finance Minister Arun Jaitley called the GST Bill revolutionary and said the tax rates will be kept at the current levels so as not to have any inflationary impact. Some support also came with the report that India’s Gross Domestic Product (GDP) is likely to grow in the range of 7.5-8 percent next year if monsoon remains normal. Care ratings, the global credit rating agency, in its latest report expects GDP growth to accelerate to 8 percent next financial year as against 7.1 percent in this year as per the latest CSO estimate and added that the monsoon will be the only domestic risk factor which may scupper this. On sectoral front, Auto stocks took a hit after the Supreme Court banned the sale of BS-III vehicles from April 1.
Traders were seen piling up positions in PSU, Financial Services and FMCG stocks, while selling was witnessed in Auto, Pharma and Realty stocks. On Tuesday, two-day ahead of the March F&O expiry, marketwide rollovers came in at 43%, which were higher than the average rollover of 42% seen during the comparable period of last three series. The top gainers from the F&O segment were Voltas, Bharti Infratel and Torrent Power. On the other hand, the top losers were Bharat Financial Inclusion, Hindustan Zinc and Ashok Leyland. In the index option segment, maximum OI continues to be seen in the 9000-9600 calls and 8400-9100 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 0.25% and reached 12.08. The 50-share Nifty was up by 43.00 points or 0.47% to settle at 9,143.80.
Nifty March 2017 futures closed at 9142.85 on Wednesday at a discount of 0.95 points over spot closing of 9143.80, while Nifty April 2017 futures ended at 9175.60, at a premium of 31.80 points over spot closing. Nifty March futures saw a contraction of 3.32 million (mn) units, taking the total outstanding open interest (OI) to 16.31 million (mn) units. The near month derivatives contract will expire on March 30, 2017.
From the most active contracts, Axis Bank March 2017 futures traded at a premium of 1.30 points at 503.85 compared with spot closing of 502.55. The numbers of contracts traded were 26,811.
State Bank of India March 2017 futures traded at a discount of 0.40 points at 288.30 compared with spot closing of 288.70. The numbers of contracts traded were 26,373.
Reliance Industries March 2017 futures traded at a discount of 2.60 points at 1256.60 compared with spot closing of 1,259.20. The numbers of contracts traded were 22,194 .
HDFC Bank March 2017 futures traded at a discount of 0.85 points at 1428.70 compared with spot closing of 1,429.55. The numbers of contracts traded were 20,207.
Infosys March 2017 futures traded at a discount of 2.30 points at 1031.50 compared with spot closing of 1,033.80. The numbers of contracts traded were 18,525.
Among Nifty calls, 9200 SP from the March month expiry was the most active call with a contraction of 0.16 million open interests. Among Nifty puts, 9100 SP from the March month expiry was the most active put with an addition of 0.91 million open interests. The maximum OI outstanding for Calls was at 9200 SP (6.54 mn) and that for Puts was at 9100 SP (5.21mn). The respective Support and Resistance levels of Nifty are: Resistance 9161.60--- Pivot Point 9135.35--- Support --- 9117.55.
The Nifty Put Call Ratio (PCR) finally stood at 1.39 for March month contract. The top five scrips with highest PCR on OI were Torrent Power (1.49), Bharti Infratel (1.38), YES Bank (1.31), HDFC (1.22) and Ultratech Cement (1.22).
Among most active underlying, State Bank of India witnessed a contraction of 17.27 million units of Open Interest in the March month futures contract, followed by Axis Bank witnessing a contraction of 5.05 million units of Open Interest in the March month contract, Reliance Industries witnessed a contraction of 2.88 million units of Open Interest in the March month contract, Punjab National Bank witnessed a contraction of 17.15 million units of Open Interest in the March month future contract and ICICI Bank witnessed a contraction of 12.66 million units of Open Interest in the March month future contract.