Tracking mixed global cues, Indian equity benchmark -- Nifty -- traded in a narrow range throughout the day and closed the session slightly in red on Tuesday as investors booked some profits in recent outperformers, awaiting cues from the state elections results due out on Saturday. Concerns about imminent U.S. interest rate hikes and the impact of new Visa policies of the U.S. government on the Indian IT sector kept the market sluggish. Sentiments also remained downbeat with RBI deputy governor Viral V Acharya’s statement that the impact of demonetisation on India’s GDP maybe seen in the current quarter in some segments even as the remonetisation exercise should be completed in two-three months. However, optimism about rollout of GST from July 2017 helped limit the market's downside. Furthermore, market participants took some support with Global rating agency Fitch’s report that India's GDP, after taking into account the impact of demonetization, to grow by 7.1 per cent for FY16-17, before picking up to 7.7 per cent in both FY17-18 and FY18-19. The global rating agency observed that gradual implementation of the structural reform agenda is expected to contribute to higher growth, as will higher real disposable income, supported by an almost 24 per cent hike in civil servants’ wages at the state level.
Traders were seen piling up positions in Realty, Media and IT stocks, while selling was witnessed in Metal, PSU and Pharma stocks. The top gainers from the F&O segment were Just Dial, Adani Power and Kaveri Seed Company. On the other hand, the top losers were Reliance Communications, Hindustan Zinc and Hindalco Industries. 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 increased by 1.72% and reached 13.87. The 50-share Nifty was down by 16.55 points or 0.18% to settle at 8,946.90.
Nifty March 2017 futures closed at 8974.10 on Tuesday at a premium of 27.20 points over spot closing of 8946.90, while Nifty April 2017 futures ended at 8999.85, at a premium of 52.95 points over spot closing. Nifty March futures saw an addition of 0.22 million (mn) units, taking the total outstanding open interest (OI) to 21.84 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 4.25 points at 820.85 compared with spot closing of 816.60. The numbers of contracts traded were 34,981.
Reliance Industries March 2017 futures traded at a premium of 3.25 points at 1309.60 compared with spot closing of 1306.35. The numbers of contracts traded were 31,389.
Hindalco Industries March 2017 futures traded at a premium of 0.70 points at 193.75 compared with spot closing of 193.05. The numbers of contracts traded were 12,893.
Just Dial March 2017 futures traded at a discount of 10.70 points at 582.65 compared with spot closing of 593.35. The numbers of contracts traded were 11,770.
Tata Motors March 2017 futures traded at a premium of 2.45 points at 469.05 compared with spot closing of 466.60. The numbers of contracts traded were 11,730.
Among Nifty calls, 9000 SP from the March month expiry was the most active call with an addition of 0.27 million open interests. Among Nifty puts, 8900 SP from the March month expiry was the most active put with an addition of 0.11 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.43 mn) and that for Puts was at 8800 SP (4.17 mn). The respective Support and Resistance levels of Nifty are: Resistance 8972.23--- Pivot Point 8952.52--- Support --- 8927.18.
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 Indo Count Industries (2.00), Tata Consultancy Services (1.35), NIIT Technologies (1.32), Godrej Industries (0.93) and Indraprastha Gas (0.90).
Among most active underlying, Reliance Industries witnessed an addition of 0.02 million units of Open Interest in the March month futures contract, followed by Bharat Financial Inclusion witnessing an addition of 1.32 million units of Open Interest in the March month contract, Tata Steel witnessed an addition of 1.05 million units of Open Interest in the March month contract, Hindalco Industries witnessed a contraction of 3.26 million units of Open Interest in the March month future contract and Tata Motors witnessed an addition of 0.66 million units of Open Interest in the March month future contract.