Nifty drifts lower on weak macroeconomic economic data

Indian equity benchmark -- Nifty -- ended notably lower on Thursday, as disappointing macroeconomic data followed by lower-than-expected March quarter earnings of IT major Infosys kept investors nervous. The retail inflation jumped to 5-month high of 3.81 % in March, while the February IIP contracted to 1.2% from 3.3% in January. The geopolitical worries, after the United States launched cruise missiles against an air base in Syria last week and fears of a new weapons test by North Korea, also contributed to the losses. Some concerns also came with the private report that the country's GDP growth is expected to dip to 6.7% in the January-March quarter from 7% in the fourth quarter of 2016. Meanwhile, President Pranab Mukherjee given his approval to four supporting legislations related to Goods and Services Tax (GST), paving the way for the roll out of one-nation-one-tax regime from July 1.

Traders were seen piling up positions in Pharma, Realty and PSU stocks, while selling was witnessed in Metal, IT and FMGG stocks. The top gainers from the F&O segment were Piramal Enterprises, Indiabulls Real Estate and NCC. On the other hand, the top losers were Vedanta, Hindalco Industries and Cairn India. 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 decreased by 0.43% and reached 11.57. The 50-share Nifty was down by 52.65 points or 0.57% to settle at 9,150.80.

Nifty April 2017 futures closed at 9182.25 on Thursday at a premium of 31.45 points over spot closing of 9150.80, while Nifty May 2017 futures ended at 9208.60, at a premium of 57.80 points over spot closing. Nifty April futures saw a contraction of 0.52 million (mn) units, taking the total outstanding open interest (OI) to 20.40 million (mn) units. The near month derivatives contract will expire on April 27, 2017.

From the most active contracts, Infosys April 2017 futures traded at a premium of 3.40 points at 936.30 compared with spot closing of 932.90. The numbers of contracts traded were 54,584.

Tata Steel April 2017 futures traded at a premium of 2.90 points at 465.75 compared with spot closing of 462.85. The numbers of contracts traded were 13,424.

Hindalco Industries April 2017 futures traded at a premium of 0.65 points at 183.75 compared with spot closing of 183.10. The numbers of contracts traded were 13,332.

ICICI Bank April 2017 futures traded at a premium of 0.45 point at 283.00 compared with spot closing of 282.55. The numbers of contracts traded were 13,143.

Vedanta April 2017 futures traded at a premium of 0.55 points at 244.50 compared with spot closing of 243.95. The numbers of contracts traded were 13,016.

Among Nifty calls, 9200 SP from the April month expiry was the most active call with an addition of 0.78 million open interests. Among Nifty puts, 9200 SP from the April month expiry was the most active put with an addition of 0.02 million open interests. The maximum OI outstanding for Calls was at 9300 SP (5.00 mn) and that for Puts was at 9000 SP (5.73 mn). The respective Support and Resistance levels of Nifty are: Resistance 9187.32--- Pivot Point 9166.13--- Support --- 9129.62.

The Nifty Put Call Ratio (PCR) finally stood at 1.10 for April month contract. The top five scrips with highest PCR on OI were BOSCH (3.29), United Breweries (1.54), Bajaj Finance (1.31), Tata Consultancy Services (1.24) and Bharat Petroleum Corporation (1.22).

Among most active underlying, Infosys witnessed an addition of 3.43 million units of Open Interest in the April month futures contract, followed by Tata Steel witnessing an addition of 2.97 million units of Open Interest in the April  month contract, Reliance Industries witnessed a contraction of 0.43 million units of Open Interest in the April month contract, Indiabulls Real Estate witnessed an addition of 13.77 million units of Open Interest in the April  month future contract and Vedanta witnessed an addition of 2.30 million units of Open Interest in the April  month future contract.