Nifty closes lower ahead of key macro-economic data

Ahead of key macro-economic data, Indian equity benchmark -- Nifty -- wiped out most of its previous day's gains on Wednesday to close lower. Industrial output data for February and retail inflation for March, slated for release after the market hours. Weak rupee against dollar along with caution over the upcoming corporate earnings season kept the sentiments down. Sentiments also soured over rising military heat in the Middle East and the Korean peninsula following last week's US strike against Syria and sabre-rattling by the US and North Korea, which pushed investors to safer assets like gold. Some concerns also came with Former Finance Minister P Chidambaram’s statement that a more realistic deadline for rolling out the goods and services tax was October 1, instead of the scheduled date of July 1. While maintaining GST would be good for the country in the long-term, the senior Congress leader cautioned the government saying that implementation of the mega tax reform could be inflationary in the short-term. He cited the preparation time needed for small and medium-scale enterprises to get on to the new tax reform structure and the time needed for activating the GSTN platform as the main reasons why he thought October was a more realistic deadline.

Traders were seen piling up positions in FMCG, Pharma and Realty stocks, while selling was witnessed in PSU, Media and IT stocks. The top gainers from the F&O segment were Indiabulls Real Estate, Bosch and Bharti Infratel. On the other hand, the top losers were Adani Power, Reliance Defence & Engineering and Adani Enterprises. In the index option segment, maximum OI continues to be seen in the 9000-9600 calls and 8500-9200 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 2.04% and reached 11.62. The 50-share Nifty was down by 33.55 points or 0.36% to settle at 9,203.45.

Nifty April 2017 futures closed at 9223.20 on Wednesday at a premium of 19.75 points over spot closing of 9203.45, while Nifty May 2017 futures ended at 9245.05, at a premium of 41.60 points over spot closing. Nifty April futures saw a contraction of 0.09 million (mn) units, taking the total outstanding open interest (OI) to 20.92 million (mn) units. The near month derivatives contract will expire on April 27, 2017.

From the most active contracts, Reliance Industries April 2017 futures traded at a premium of 5.70 points at 1360.70 compared with spot closing of 1,355.00. The numbers of contracts traded were 21,571.

Vedanta April 2017 futures traded at a premium of 0.90 points at 258.70 compared with spot closing of 257.80. The numbers of contracts traded were 16,822.

ICICI Bank April 2017 futures traded at a premium of 1.05 points at 281.75 compared with spot closing of 280.70. The numbers of contracts traded were 15,415.

State Bank of India April 2017 futures traded at a premium of 1.35 point at 291.60 compared with spot closing of 290.25. The numbers of contracts traded were 13,552.

Reliance Capital April 2017 futures traded at a premium of 3.65 points at 612.00 compared with spot closing of 608.35. The numbers of contracts traded were 12,902.

Among Nifty calls, 9300 SP from the April month expiry was the most active call with an addition of 0.83 million open interests. Among Nifty puts, 9200 SP from the April month expiry was the most active put with a contraction of 0.65 million open interests. The maximum OI outstanding for Calls was at 9300 SP (4.50 mn) and that for Puts was at 9000 SP (5.66 mn). The respective Support and Resistance levels of Nifty are: Resistance 9245.97--- Pivot Point 9203.88--- Support --- 9161.37.

The Nifty Put Call Ratio (PCR) finally stood at 1.11 for April month contract. The top five scrips with highest PCR on OI were BOSCH (3.29), United Breweries (1.63), Tata Consultancy Services (1.34), Bajaj Finance (1.24) and Bharat Petroleum Corporation (1.15).

Among most active underlying, Reliance Industries witnessed an addition of 1.42 million units of Open Interest in the April month futures contract, followed by Rural Electrification Corporation witnessing an addition of 1.25 million units of Open Interest in the April  month contract, Vedanta witnessed a contraction of 1.35 million units of Open Interest in the April month contract, Tata Steel witnessed an addition of 2.20 million units of Open Interest in the April  month future contract and State Bank of India witnessed an addition of 1.11 million units of Open Interest in the April  month future contract.