Nifty snaps 2 days winning streak; slips below 9,050 mark

Indian equity benchmark -- Nifty -- snapped two days winning streak to close in red on Monday amid weak global cues. Investor’s sentiments remained subdued over US President Donald Trump’s economic growth agenda. Along with weak global cues, a below normal monsoon forecast dragged the indices lower. According to a private report Monsoon 2017 is likely to remain below normal with an error margin of +/-5% for the four-month period from June to September. Meanwhile, market heavyweight Reliance Industries (RIL) came under pressure after the Securities and Exchange Board of India (SEBI) banned the company from accessing the equity derivatives market for a year and directed the company to disgorge the profits made by violating the rules on unfair trade practices when it sold a stake in its erstwhile unit Reliance Petroleum. However, investors failed to draw support after Finance Minister Arun Jaitley introduced four supplementary GST legislations - CGST, IGST, UTGST and Compensation Law in Lok Sabha. On sectoral front, some tyre stocks edged higher ahead of the Commerce Ministry meeting tomorrow to discuss anti-dumping duty on import of certain kind of radial tyres, while stocks of some information technology companies and drugmakers were hit by a stronger rupee against dollar. 

Traders were seen piling up positions only in PSU and Media stocks, while selling was witnessed in Metal, Phrama and Auto stocks. The top gainers from the F&O segment were Sintex Industries, Punjab National Bank and Petronet LNG.  On the other hand, the top losers were JSW Steel, Steel Authority of India and Idea Cellular. In the index option segment, maximum OI continues to be seen in the 8900-9500 calls and 8400-9100 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 3.81% and reached 12.43. The 50-share Nifty was down by 62.80 points or 0.69% to settle at 9,045.20.

Nifty March 2017 futures closed at 9067.95 on Monday at a premium of 22.75 points over spot closing of 9,045.20, while Nifty April 2017 futures ended at 9101.55, at a premium of 56.35 points over spot closing. Nifty March futures saw a contraction of 4.40 million (mn) units, taking the total outstanding open interest (OI) to 21.38 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 5.90 points at 1254.40 compared with spot closing of 1,248.50. The numbers of contracts traded were 23,887.

State Bank of India March 2017 futures traded at a premium of 0.80 points at 279.70 compared with spot closing of 278.90. The numbers of contracts traded were 19,674.

Infosys March 2017 futures traded at a discount of 6.15 points at 1028.85 compared with spot closing of 1,035.00. The numbers of contracts traded were 18,979.

HDFC Bank March 2017 futures traded at a premium of 2.60 points at 1414.55 compared with spot closing of 1,411.95. The numbers of contracts traded were 16,539.

ICICI Bank March 2017 futures traded at a premium of 1.05 points at 273.85 compared with spot closing of 272.80. The numbers of contracts traded were 15,251.

Among Nifty calls, 9100 SP from the March month expiry was the most active call with an addition of 1.48 million open interests. Among Nifty puts, 9000 SP from the March month expiry was the most active put with an addition of 0.35 million open interests. The maximum OI outstanding for Calls was at 9200 SP (6.98 mn) and that for Puts was at 8800 SP (5.25 mn). The respective Support and Resistance levels of Nifty are: Resistance 9085.15--- Pivot Point 9054.90--- Support --- 9014.95.

The Nifty Put Call Ratio (PCR) finally stood at 1.06 for March month contract. The top five scrips with highest PCR on OI were Kotak Mahindra Bank (1.22), YES Bank (1.13), Ultratech Cement (1.09), HDFC (1.05) and Indusind Bank (1.04).

Among most active underlying, Reliance Industries witnessed a contraction of 1.87 million units of Open Interest in the March month futures contract, followed by State Bank of India witnessing a contraction  of 12.40 million units of Open Interest in the March  month contract, Tata Steel witnessed a contraction of 2.09 million units of Open Interest in the March month contract, Punjab National Bank witnessed a contraction of 1.93 million units of Open Interest in the March  month future contract and ICICI Bank witnessed a contraction of 6.93 million units of Open Interest in the March  month future contract.