Nifty ends below 8,900 mark

Indian equity benchmark -- Nifty -- closed lower on Monday as investors remained cautious ahead of Q3 GDP data to be published on Tuesday as well as ahead of the US president Donald Trump's speech to a joint session of Congress on Tuesday night, where he is expected to unveil some elements of his plans to cut taxes. Investors’ sentiments remained subdued with domestic ratings agency India Ratings and Research’s report that the states' fiscal deficit will rise only marginally to 3.3 percent in fiscal year 2017-18 from the expected 3.2 percent in 2016-17. Furthermore, market participants turned pessimistic with the economic think-tank, National Council of Applied Economic Research (NCAER) report which lowered the country’s growth forecast to 6.9 percent for the current fiscal on account of government’s demonetisation drive to curb black money and corruption. A few days before demonetization was announced, NCAER had projected a growth rate of 7.6 percent for 2016-17. Further, it has projected that Wholesale Price Index (WPI) inflation will remain low in 2016-17 that is at 3.6 per cent. However, it is projected to accelerate in 2017-18 due to rising crude oil inflation.

Traders were seen piling up positions in IT, Realty and Pharma stocks, while selling was witnessed in Banking, Auto and Metal stocks. The top gainers from the F&O segment were Jaiprakash Associates, Wockhardt and Jindal Steel & Power. On the other hand, the top losers were Idea Cellular, Axis Bank and IDBI Bank. 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 2.05% and reached 13.67. The 50-share Nifty was down by 42.80 points or 0.48% to settle at 8896.70.

Nifty March 2017 futures closed at 8915.75 on Monday at a premium of 19.05 points over spot closing of 8896.70, while Nifty April 2017 futures ended at 8950.70, at a premium of 54 points over spot closing. Nifty March futures saw a contraction of 0.46 million (mn) units, taking the total outstanding open interest (OI) to 21.36 million (mn) units. The near month derivatives contract will expire on March 30, 2017.

From the most active contracts, Reliance Industries March 2017 futures traded at a premium of 1.60 points at 1239.15 compared with spot closing of 1237.55. The numbers of contracts traded were 56,137.

Wockhardt March 2017 futures traded at a premium of 6.95 points at 763.95 compared with spot closing of 757.00. The numbers of contracts traded were 17,792.

Axis Bank March 2017 futures traded at a premium of 2.20 points at 511.30 compared with spot closing of 509.10. The numbers of contracts traded were 12,211.

ICICI Bank March 2017 futures traded at a premium of 0.95 points at 280.30 compared with spot closing of 279.35. The numbers of contracts traded were 10,673.

Jet Airways (India) March 2017 futures traded at a premium of 1.90 points at 447.90 compared with spot closing of 446.00. The numbers of contracts traded were 10,430.

Among Nifty calls, 9000 SP from the March month expiry was the most active call with an addition of 0.57 million open interests. Among Nifty puts, 8900 SP from the March  month expiry was the most active put with an addition of 0.46 million open interests. The maximum OI outstanding for Calls was at 9000 SP (3.93mn) and that for Puts was at 8500 SP (3.61 mn). The respective Support and Resistance levels of Nifty are: Resistance 8936.12 --- Pivot Point 8912.38--- Support --- 8872.97.

The Nifty Put Call Ratio (PCR) finally stood at 0.95 for March month contract. The top five scrips with highest PCR on OI were Torrent Power (1.97), Ultratech Cement (1.45), Grasim Industries (1.32), United Breweries (1.27) and ACC (1.18).

Among most active underlying, Reliance Industries witnessed a contraction of 0.29 million units of Open Interest in the March month futures contract, followed by Jindal Steel & Power witnessing an addition of 7.70  million units  of Open Interest in the March  month contract, State Bank of India witnessed an addition of 1.94 million units of Open Interest in the March month contract, Axis Bank witnessed a contraction of 1.22 million units of Open Interest in the March  month future contract and Wockhardt witnessed an addition of 0.86 million units of Open Interest in the March  month future contract.