Nifty ends volatile day above 9600 mark for first time

Indian equity benchmark -- Nifty -- managed to end the volatile day at fresh closing high on Monday. Investors remained optimistic with the report that the Employees Provident Fund Organisation has approved hike in investment limit in exchange traded funds (ETFs) to 15 per cent, from the existing 10 per cent. Besides, sentiments were boosted by hopes of timely arrival of southwest monsoon rains after India Meteorological Department (IMD) in a press release dated May 29 2017 said that conditions are becoming favorable for further advance of southwest monsoon and its setting over Kerala and parts of northeastern states around 30th to 31st May 2017. Some support also came with Finance Minister Arun Jaitley’s statement that the Goods and Services Tax, to be rolled out in just over a month, will not only check evasions but also help India evolve as a more tax-compliant society.  However, gains remained limited with traders’ body Confederation of All India Traders (CAIT) stating that classification of goods under different tax slabs of the proposed pan-India indirect tax regime of the GST has created an environment of anxiety and concern among the trading community across the country. Furthermore, muted global cues spread some cautiousness as North Korea fired another missile off its east coast, the latest in a fast-paced series of missile tests defying world pressure and threats of more sanctions.

Traders were seen piling up positions in Auto, Financial Services and FMCG stocks, while selling was witnessed in Realty, Pharma and PSU stocks. The top gainers from the F&O segment were PC Jeweller, Tata Communications and Escorts.  On the other hand, the top losers were Reliance Communications, CG Power & Industrial Solutions and Sun Pharmaceutical Industries. In the index option segment, maximum OI continues to be seen in the 9400-10000 calls and 9000-9600 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 8.52% and reached 11.78. The 50-share Nifty was up by 9.80 points or 0.10% to settle at 9,604.90.

Nifty June 2017 futures closed at 9605.70 on Monday at a premium of 0.80 points over spot closing of 9604.90, while Nifty July 2017 futures ended at 9620.90, at a premium of 16 points over spot closing. Nifty June futures saw an addition of 1.53 million (mn) units, taking the total outstanding open interest (OI) to 20.49 million (mn) units. The near month derivatives contract will expire on June 29, 2017.

From the most active contracts, Sun Pharmaceutical Industries June 2017 futures traded at a premium of 5.35 points at 505.55 compared with spot closing of 500.20. The numbers of contracts traded were 53,700.

Reliance Industries June 2017 futures traded at a discount of 1.75 points at 1353.50 compared with spot closing of 1355.25. The numbers of contracts traded were 18,581.

DLF June 2017 futures traded at a premium of 1.80 points at 176.95 compared with spot closing of 175.15. The numbers of contracts traded were 18,366.

Tech Mahindra June 2017 futures traded at a premium of 0.35 points at 380.40 compared with spot closing of 380.05. The numbers of contracts traded were 17,675.

Reliance Capital June 2017 futures traded at a discount of 2.15 points at 541.00 compared with spot closing of 543.15. The numbers of contracts traded were 16,630.

Among Nifty calls, 9700 SP from the June month expiry was the most active call with an addition of 0.47 million open interests. Among Nifty puts, 9500 SP from the June month expiry was the most active put with an addition of 0.90 million open interests. The maximum OI outstanding for Calls was at 9700 SP (3.90 mn) and that for Puts was at 9400 SP (4.83 mn). The respective Support and Resistance levels of Nifty are: Resistance 9645.87--- Pivot Point 9596.78--- Support --- 9555.82.

The Nifty Put Call Ratio (PCR) finally stood at 1.12 for June month contract. The top five scrips with highest PCR on OI were Bosch (8.00), V-Guard Industries (2.20), Aditya Birla Nuvo (2.09), Torrent Pharmaceuticals (1.67) and Indraprastha Gas (1.46).

Among most active underlying, DLF witnessed an addition of 6.91 million units of Open Interest in the June month futures contract, followed by Sun Pharmaceutical Industries witnessing an addition of 8.52 million units of Open Interest in the June  month contract, Tata Steel  witnessed a contraction of 1.16 million units of Open Interest in the June month contract, Reliance Industries witnessed a contraction of 0.82 million units of Open Interest in the June  month future contract and State Bank of India witnessed an addition of 7.12 million units of Open Interest in the June month future contract.