Indian equity benchmark -- Nifty -- extended its gains for the second consecutive day and ended a choppy session slightly higher on Thursday amid buying in selected blue chip counters. Sentiments got support from a private report indicating that India is expected to clock a GDP growth of 7.1 percent in 2017-18, up from 6.3 percent in 2016-17, as the country gets sufficiently remonetised and the schemes in the Budget play a supportive role. The uptick in the growth numbers would be largely driven by the remonetisation process which is expected by April end, as this in turn would boost the consumption levels in the country. Traders took encouragement with Finance Minister Arun Jaitley’s statement that slowdown in economic activity on account of demonetisation was only temporary and its effect would not spill over to the next financial year. He also said that the move has a strong potential to generate long term benefits in terms of reduced corruption, greater digitisation of economy, increased flow of financial savings and greater formalisation of economy. However, gains were capped on the back of negative global cues and weak automobile sales results. Investors’ sentiments remained cautious ahead of Reserve Bank of India’s February 8 policy statement, as well as the results of the Bank of England’s policy meeting later in the day.
Traders were seen piling up positions in Pharma, IT and PSU stocks, while selling was witnessed only in Auto stocks. The top gainers from the F&O segment were Godrej Industries, Oracle Financial Services Software and Cummins India. On the other hand, the top losers were Hindalco Industries, Mahindra & Mahindra and ACC. In the index option segment, maximum OI continues to be seen in the 8600-9100 calls and 8000-8600 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 3.22% and reached 13.52. The 50-share Nifty was up by 17.85 points or 0.20% to settle at 8,734.25.
Nifty February 2017 futures closed at 8743.95 on Thursday at a premium of 9.70 points over spot closing of 8734.25, while Nifty March 2017 futures ended at 8774.50, at a premium of 40.25 points over spot closing. Nifty February futures saw an addition of 0.79 million (mn) units, taking the total outstanding open interest (OI) to 21.65 million (mn) units. The near month derivatives contract will expire on February 23, 2017.
From the most active contracts Bharat Financial Inclusion February 2017 futures traded at a premium of 3.85 points at 825.85 compared with spot closing of 822.00. The numbers of contracts traded were 34,972.
ICICI Bank February 2017 futures traded at a premium of 2.05 points at 285.60 compared with spot closing 283.55. The numbers of contracts traded were 22,174.
Infosys February 2017 futures traded at a premium of 3.45 points at 938.15 compared with spot closing of 934.70. The numbers of contracts traded were 21,442.
State Bank of India February 2017 futures traded at a premium of 1.15 points at 273.90 compared with spot closing of 272.75. The numbers of contracts traded were 19,367.
Tata Consultancy Services February 2017 futures traded at a premium of 9.90 points at 2214.35 compared with spot closing of 2,204.45. The numbers of contracts traded were 17,482.
Among Nifty calls, 8800 SP from the February month expiry was the most active call with an addition of 0.24 million open interests. Among Nifty puts, 8600 SP from the February month expiry was the most active put with an addition of 0.68 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.17 mn) and that for Puts was at 8500 SP (5.14 mn). The respective Support and Resistance levels of Nifty are: Resistance 8765.97--- Pivot Point 8725.88--- Support --- 8694.17.
The Nifty Put Call Ratio (PCR) finally stood at 1.04 for February month contract. The top five scrips with highest PCR on OI were Bharti Airtel(1.28), Maruti Suzuki India (1.24), IDEA (1.21), Indiabulls Real Estate(1.15) and ITC(1.08).
Among most active underlying, Bharat Financial Inclusion witnessed a contraction of 0.53 million units of Open Interest in the February month futures contract, followed by State Bank of India witnessing an addition of 0.21 million units of Open Interest in the February month contract, ICICI Bank witnessed a contraction of 3.59 million units of Open Interest in the February month contract, Idea Cellular witnessed a contraction of 1.23 million units of Open Interest in the February month future contract and Tata Steel witnessed an addition of 0.75 million units of Open Interest in the February month future contract.