Nifty ends in negative territory; manages to hold 9,300 mark

After trading in a tight range near the neutral line for most part of the day, Indian equity benchmark -- Nifty -- ended the day in negative territory, though managed to hold its 9,300 mark. Investors’ sentiments remained pessimistic with Fitch Ratings maintaining the 'BBB-' sovereign rating-the lowest investment grade-on India as weak public finances continue to constrain India's ratings. Some concerns also with the United Nations (UN) report projecting India’s growth to remain stable at 7.1% in 2017 before edging up to 7.5% in 2018. It further stated that if the US policies take a very severe protectionist turn and the trend spreads, the India’s growth could be affected by as much as 1.2% in the coming years. Besides, investors were seen cautious ahead of the outcome of the two-day US Federal Open Market Committee (FOMC) meet. However, losses remained capped with Prime Minister Narendra Modi reviewing the progress of the government’s agenda to curb black-money and tax evasion as well as the roll out of the Goods and Services Tax (GST).

Traders were seen piling up positions in Realty, PSU and IT stocks, while selling was witnessed in Metal, Pharma and Media stocks.  The top gainers from the F&O segment were Raymond, PTC India and Gujarat State Fertilizers & Chemicals. On the other hand, the top losers were Granules India, Adani Power and Biocon. In the index option segment, maximum OI continues to be seen in the 9200-9700 calls and 8500-9300 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 0.69% and reached 11.52. The 50-share Nifty was down by 1.85 points or 0.02% to settle at 9,311.95.

Nifty May 2017 futures closed at 9340.25 on Wednesday at a premium of 28.30 points over spot closing of 9311.95, while Nifty June 2017 futures ended at 9336.65, at a premium of 24.70 points over spot closing. Nifty May futures saw an addition of 0.22 million (mn) units, taking the total outstanding open interest (OI) to 19.51 million (mn) units. The near month derivatives contract will expire on May 25, 2017.

From the most active contracts, Punjab National Bank May 2017 futures traded at a discount of 3.40 points at 171.60 compared with spot closing of 175.00. The numbers of contracts traded were 20,554.

Dewan Housing Finance Corporation May 2017 futures traded at a premium of 2.25 points at 446.15 compared with spot closing of 443.90. The numbers of contracts traded were 19,853.

State Bank of India May 2017 futures traded at a premium of 0.85 points at 290.25 compared with spot closing of 289.40. The numbers of contracts traded were 17,422.

Century Textiles & Industries May 2017 futures traded at a premium of 10.25 points at 1176.25 compared with spot closing of 1,166.00. The numbers of contracts traded were 17,105.

Bank of Baroda May 2017 futures traded at a premium of 0.90 points at 190.20 compared with spot closing of 189.30. The numbers of contracts traded were 15,745.

Among Nifty calls, 9400 SP from the May month expiry was the most active call with an addition of 0.48 million open interests. Among Nifty puts, 9300 SP from the May month expiry was the most active put with an addition of 0.63 million open interests. The maximum OI outstanding for Calls was at 9500 SP (4.99 mn) and that for Puts was at 9000 SP (4.78 mn). The respective Support and Resistance levels of Nifty are: Resistance 9339.37--- Pivot Point 9318.88--- Support --- 9291.47.

The Nifty Put Call Ratio (PCR) finally stood at 1.07 for May month contract. The top five scrips with highest PCR on OI were Infibeam Incorporation (2.78), Balkrishna Industries (2.00), Hero Motocorp (1.27), Torrent Power (1.22) and Fortis Healthcare (1.21).

Among most active underlying, State Bank of India witnessed a contraction of 1.62 million units of Open Interest in the May month futures contract, followed by ICICI Bank witnessing an addition of 3.45 million units of Open Interest in the May  month contract, Dewan Housing Finance Corporation witnessed a contraction of 0.42 million units of Open Interest in the May month contract, Punjab National Bank witnessed a contraction of 1.87 million units of Open Interest in the May  month future contract and Reliance Industries witnessed an addition of 0.34 million units of Open Interest in the May month future contract.