Indian equity benchmark -- Nifty -- pared initial gains and slipped into the negative zone in the last hour of trade on Thursday, as anxiety spread among investors after a report that the GST Council proposed to raise the peak tax rate to 20 percent, from the current 14 percent, in the model goods and services tax Bill to preclude the requirement of approaching Parliament for any change in rates in future. The change in the peak rate will not alter the 4-slab rate structure of 5, 12, 18 and 28 percent agreed upon last year, but is only a provision being built into the model law to take care of contingencies in future. However, downside remained capped with firm global cues following U.S. President Donald Trump's address to a joint session of Congress. The US president's much-anticipated address on Tuesday, while lacking details, was broadly welcomed as he promised a trillion-dollar infrastructure splurge and tax cuts -- music to bullish investors' ears. Furthermore, some support also came with the report stating that India is expected to clock a GDP growth of 6.9 percent this financial year, which is likely to recover to 7.2 per cent in 2017-18. The global financial services major also said rate cuts hold the key to recovery and expects a 50-70 bps reduction in lending rates by banks by September.
Traders were seen offloading their positions in Realty, PSU and Pharma stocks, while buying was witnessed only in Auto stocks. The top gainers from the F&O segment were Jubilant Foodworks, Tata Motors and Havells India. On the other hand, the top losers were Biocon, DLF and Jaiprakash Associates. In the index option segment, maximum OI continues to be seen in the 8900-9500 calls and 8400-9000 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 1.56% and reached 13.36. The 50-share Nifty was down by 46.05 points or 0.51% to settle at 8899.75.
Nifty March 2017 futures closed at 8917.20 on Thursday at a premium of 17.45 points over spot closing of 8899.75, while Nifty April 2017 futures ended at 8950.95, at a premium of 51.20 points over spot closing. Nifty March futures saw a contraction of 0.33 million (mn) units, taking the total outstanding open interest (OI) to 22.12 million (mn) units. The near month derivatives contract will expire on March 30, 2017.
From the most active contracts, Bharat Financial Inclusion March 2017 futures traded at a premium of 2.60 points at 799.60 compared with spot closing of 797.00. The numbers of contracts traded were 30,500.
Hindalco Industries March 2017 futures traded at a discount of 0.05 points at 190.75 compared with spot closing of 190.80. The numbers of contracts traded were 21,581.
Tata Motors March 2017 futures traded at a premium of 0.95 points at 462.25 compared with spot closing of 461.30. The numbers of contracts traded were 21,180.
Vedanta March 2017 futures traded at a discount of 1.10 points at 270.85 compared with spot closing of 271.95. The numbers of contracts traded were 19,923.
Reliance Industries March 2017 futures traded at a premium of 2.95 points at 1237.90 compared with spot closing of 1234.95. The numbers of contracts traded were 17,008.
Among Nifty calls, 9000 SP from the March month expiry was the most active call with an addition of 0.50 million open interests. Among Nifty puts, 8900 SP from the March month expiry was the most active put with an addition of 0.18 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.12 mn) and that for Puts was at 8800 SP (4.05 mn). The respective Support and Resistance levels of Nifty are: Resistance 8968.23--- Pivot Point 8924.02--- Support --- 8855.53.
The Nifty Put Call Ratio (PCR) finally stood at 0.93 for March month contract. The top five scrips with highest PCR on OI were NIIT Technologies (1.33), Godrej Consumer Products (1.08), Hexaware Technologies (1.01), UPL (0.96) and Indraprastha Gas (0.92).
Among most active underlying, Bharat Financial Inclusion witnessed an addition of 1.42 million units of Open Interest in the March month futures contract, followed by Vedanta witnessing a contraction of 0.62 million units of Open Interest in the March month contract, Tata Steel witnessed a contraction of 1.00 million units of Open Interest in the March month contract, Reliance Industries witnessed a contraction of 0.23 million units of Open Interest in the March month future contract and Tata Motors witnessed a contraction of 1.57 million units of Open Interest in the March month future contract.