Nifty ends choppy session on weak note

After three back-to-back sessions of gains, Indian equity benchmark -- Nifty -- came off its peak and ended the choppy day on a weak note as investors took a breather and booked profits on last day of April derivatives expiry. Weak opening in European markets also weighed on the domestic sentiments. Investors were looking forward to US President Donald Trump’s plan for the US tax system. Sentiments remained downbeat for the most part of the day after Finance Minister Arun Jaitley expressed concern over the worrying signs of economic protectionism and added that continued unpredictability in ties between major powers has brought new uncertainties to the fore. However, downside remained capped with the report that bank credit growth improved to 5.52 percent in the first fortnight of the financial year (FY18), after falling to a whopping six-decade low of 5.08 per cent in the previous financial year (FY17). As per the Reserve Bank of India data, credit in the banking system rose to Rs 76.31 trillion in the fortnight to April 14 from Rs 72.31 trillion in the week to April 15, 2016. Meanwhile, the Securities and Exchange Board of India (SEBI) approved a slew of reform measures to provide a fillip to the domestic markets, which include approval to options trading in commodity derivatives, unified licence for brokers, mutual fund investments through digital wallets, stricter public offer norms and enhanced safeguards to curb illicit fund flows.

Traders were seen piling up positions in IT, Media and Realty stocks, while selling was witnessed in FMCG, Metal and Pharma stocks.  The top gainers from the F&O segment were Bank of India, IDFC Bank and JSW Energy. On the other hand, the top losers were Tata Elxsi, Adani Enterprises and Aurobindo Pharma.  In the index option segment, maximum OI continues to be seen in the 9200-9700 calls and 8700-9400 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 5.71% and reached 11.07. The 50-share Nifty was down by 9.70 points or 0.10% to settle at 9,342.15.

Nifty May 2017 futures closed at 9356.65 on Thursday at a premium of 14.50 points over spot closing of 9342.15, while Nifty June 2017 futures ended at 9363.30, at a premium of 21.15 points over spot closing. Nifty May futures saw an addition of 4.32 million (mn) units, taking the total outstanding open interest (OI) to 19.77 million (mn) units. The near month derivatives contract will expire on May 25, 2017.

From the most active contracts, HDFC Bank May 2017 futures traded at a premium of 2.15 points at 1556.15 compared with spot closing of 1,554.00. The numbers of contracts traded were 32,804.

Axis Bank May 2017 futures traded at a premium of 0.75 points at 509.00 compared with spot closing of 508.25. The numbers of contracts traded were 29,890.

State Bank of India May 2017 futures traded at a premium of 0.60 points at 283.50 compared with spot closing of 282.90. The numbers of contracts traded were 18,083.

Among Nifty calls, 9400 SP from the May month expiry was the most active call with an addition of 0.51 million open interests. Among Nifty puts, 9300 SP from the May month expiry was the most active put with an addition of 1.07 million open interests. The maximum OI outstanding for Calls was at 9500 SP (4.24 mn) and that for Puts was at 9000 SP (4.29 mn). The respective Support and Resistance levels of Nifty are: Resistance 9365.32--- Pivot Point 9343.98--- Support --- 9320.82.

The Nifty Put Call Ratio (PCR) finally stood at 1.00 for May month contract. The top five scrips with highest PCR on OI were Infibeam Incorporation (4.86), Bajaj Finance (1.83), Dalmia Bharat (1.67), Marico (1.63) and Max Financial Services (1.62).

Among most active underlying, Maruti Suzuki India witnessed an addition of 0.48 million units of Open Interest in the May month futures contract, followed by Yes Bank witnessing an addition of 3.15 million units of Open Interest in the May  month contract, Axis Bank witnessed an addition of 11.28  million units of Open Interest in the May month contract, Reliance Capital witnessed an addition of 5.05 million units of Open Interest in the May  month future contract and State Bank of India witnessed an addition of 26.77 million units of Open Interest in the May month future contract.