Nifty ends in negative territory

Indian benchmark -- Nifty – traded in a narrow range and ended the session in negative territory on Monday, as the quarterly reporting season kicked in, investors concerned that companies' quarterly results will be impacted by the Centre's surprise demonetisation move. Besides, other developments with regard to state assembly elections and next month's Union Budget were also influencing sentiments. In early deals, market remained under pressure with the Central Statistics Office (CSO) report that the economic growth is expected to be 7.1 percent in FY 2016-17 as compared to the growth rate of 7.6 percent in FY 2015-16. Manufacturing sector is estimated to grow by 7.4 percent as compared to growth of 9.3 percent in 2015-16. The growth rate in per capita income is estimated at 5.6 percent during 2016-17, as against 6.2 percent in the previous year. However, losses remained capped with the Finance Minister Arun Jaitley’s statement that the impact of demonetisation on the economy would be “transient” but in the medium and long run, the GDP would be “bigger and cleaner” and it will also help lower interest rates. He also said that the Goods and Services Tax (GST), which will be implemented this year, will provide for better indirect tax administration and being a more efficient law will check tax evasion.

Traders were seen piling up positions in IT, Realty and FMCG stocks, while selling was witnessed in Pharma, Metal and AUTO stocks. The top gainers from the F&O segment were BEML, Biocon and Strides Shasun. On the other hand, the top losers were Granules India, Cadila Healthcare and Dr. Reddy's Laboratories. In the index option segment, maximum OI continues to be seen in the 8100-8600 calls and 7500-8300 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 3.80% and reached 15.48. The 50-share Nifty was down by 7.75 points or 0.09% to settle at 8,236.05.

Nifty January 2017 futures closed at 8249.90 on Monday at a premium of 13.85 points over spot closing of 8,236.05, while Nifty February 2017 futures ended at 8277.05 at a premium of 41 points over spot closing. Nifty January futures saw a contraction of 0.01 million (mn) units, taking the total outstanding open interest (OI) to 18.70 million (mn) units. The near month derivatives contract will expire on January 25, 2017.

From the most active contracts, BEML January 2017 futures traded at a premium of 0.85 points at 1151.30 compared with spot closing of 1,150.45. The numbers of contracts traded were 16,608.

Infosys January 2017 futures traded at a premium of 4.30 points at 974.30 compared with spot closing 970.00. The numbers of contracts traded were 13,005.

Divi's Laboratories January 2017 futures traded at a premium of 5.40 points at 737.05 compared with spot closing of 731.65. The numbers of contracts traded were 11,568.

Biocon January 2017 futures traded at a discount of 1.55 points at 1013.80 compared with spot closing of 1,015.35. The numbers of contracts traded were 10,532.

Yes Bank January 2017 futures traded at a premium of 2.70 points at 1258.70 compared with spot closing of 1,256.00. The numbers of contracts traded were 10,295.

Among Nifty calls, 8300 SP from the January month expiry was the most active call with an addition of 0.17  million open interests. Among Nifty puts, 8200 SP from the january month expiry was the most active put with an addition of 0.09million open interests. The maximum OI outstanding for Calls was at 8400 SP (5.30 mn) and that for Puts was at 8000 SP (6.67 mn). The respective Support and Resistance levels of Nifty are: Resistance 8256.78--- Pivot Point 8242.27--- Support --- 8221.53.

The Nifty Put Call Ratio (PCR) finally stood at 1.20 for January month contract. The top five scrips with highest PCR on OI were Bosch Ltd (4.00), Pidilite Industries (3.61), Dabur India (2.02), Maruti Suzuki India (1.73) and TVS Motor (1.64).

Among most active underlying, Yes Bank witnessed a contraction of 0.02 million of Open Interest in the January month futures contract, followed by BEML witnessing an addition of 0.48 million of Open Interest in the January month contract, Tata Motors witnessed an addition of 0.23  million of Open Interest in the January month contract, State Bank of India witnessed a contraction of 0.64 million units of Open Interest in the January month future contract and Biocon witnessed an addition of 0.45 million units of Open Interest in the January month future contract.