Indian equity benchmark -- Nifty -- ended the day marginally lower on Wednesday after hitting its all time high in the previous session, as a sharp rally in the rupee hurt shares of IT firms and sentiments turned cautious ahead of the U.S. Federal Reserve's rate decision later in the day. The Fed is almost universally expected to raise its benchmark interest rates, but investors are keen on seeing how much more tightening will happen this year. However, downside remained capped with Moody’s Investors Service’s report that Prime Minister Narendra Modi-led BJP's astounding victory in Uttar Pradesh and remarkable gains made in other states will facilitate reforms as the ruling party inches closer to a majority in Upper House. It added that the 2017 state election results in India demonstrate broad-based popular support for the Indian government's policy agenda and will facilitate the implementation of further reforms, a credit positive for the sovereign.
Traders were seen piling up positions in Banking, Auto and Media stocks, while selling was witnessed only in IT stocks. The top gainers from the F&O segment were Idea Cellular, MRF and Indo Count Industries. On the other hand, the top losers were Torrent Power, Tata Consultancy Services and Infosys. In the index option segment, maximum OI continues to be seen in the 8900-9500 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 increased by 0.18% and reached 12.42. The 50-share Nifty was down by 2.20 points or 0.02% to settle at 9,084.80.
Nifty March 2017 futures closed at 9109.30 on Wednesday at a premium of 24.50 points over spot closing of 9084.80, while Nifty April 2017 futures ended at 9138.35, at a premium of 53.55 points over spot closing. Nifty March futures saw an addition of 0.09 million (mn) units, taking the total outstanding open interest (OI) to 25.28 million (mn) units. The near month derivatives contract will expire on March 30, 2017.
From the most active contracts, Idea Cellular March 2017 futures traded at a premium of 0.10 points at 113.35 compared with spot closing of 113.25. The numbers of contracts traded were 22,577.
Reliance Industries March 2017 futures traded at a premium of 2.90 points at 1304.90 compared with spot closing of 1302.00. The numbers of contracts traded were 19,160.
State Bank of India March 2017 futures traded at a premium of 1.55 points at 278.10 compared with spot closing of 276.55. The numbers of contracts traded were 18,608.
MRF March 2017 futures traded at a discount of 571 points at 56529.00 compared with spot closing of 57100.00. The numbers of contracts traded were 12,177.
Century Textiles & Industries March 2017 futures traded at a premium of 5.65 points at 1021.65 compared with spot closing of 1016.00. The numbers of contracts traded were 11,182.
Among Nifty calls, 9100 SP from the March month expiry was the most active call with a contraction of 0.16 million open interests. Among Nifty puts, 9000 SP from the March month expiry was the most active put with an addition of 0.25 million open interests. The maximum OI outstanding for Calls was at 9200 SP (4.96 mn) and that for Puts was at 8800 SP (5.58 mn). The respective Support and Resistance levels of Nifty are: Resistance 9102.40--- Pivot Point 9088.95--- Support --- 9071.35.
The Nifty Put Call Ratio (PCR) finally stood at 1.03 for March month contract. The top five scrips with highest PCR on OI were Colgate-Palmolive (India) (2.25), Bajaj-Auto (1.26), YES Bank (1.23), Maruti Suzuki India (1.17) and Jindal Steel & Power (1.10).
Among most active underlying, Idea Cellular witnessed an addition of 1.65 million units of Open Interest in the March month futures contract, followed by State Bank of India witnessing a contraction of 1.34 million units of Open Interest in the March month contract, Reliance Industries witnessed a contraction of 0.75 million units of Open Interest in the March month contract, Tata Steel witnessed an addition of 0.23 thousands units of Open Interest in the March month future contract and Century Textiles & Industries witnessed an addition of 0.26 million units of Open Interest in the March month future contract.