Nifty slips from record high; breaches 9,300 mark

Continuing its dismal trade throughout the day, the local benchmark -- Nifty -- closed the trading session on negative note near its intraday lows on Friday, as investors booked profits after yesterday’s rally. Investors remained on sidelines ahead of the U.S. jobs report slated for release later in the day and elections in France due this weekend. Also, market participants maintained a cautious approach ahead of the Goods and Services Tax (GST) Council meeting, scheduled on May 18-19, to finalise the rates of different commodities and services. It will also approve rates of remaining items. The markets paid no heed towards the Confederation of Indian Industry (CII) President Shobana Kamineni's statement that India can achieve a gross domestic product (GDP) growth of 10 percent by fiscal year 2019-20 on the back of tremendous opportunities available in the economy. She added that the drivers for this step up in growth would include the benefits from implementation of GST and greater participation of women in the labour force. Meanwhile, banking stocks dipped after the government notified the Banking Regulation (Amendment) Ordinance, 2017, while a drop in crude prices dragged down oil explorers such as ONGC and Oil India.

All the sectoral indices on NSE closed in red. The top gainers from the F&O segment were Escorts, The Federal Bank and CEAT. On the other hand, the top losers were Tata Communications, Jain Irrigation Systems and Bank of India. In the index option segment, maximum OI continues to be seen in the 9200-9700 calls and 8500-9400 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 5.78% and reached 11.98. The 50-share Nifty was down by 74.60 points or 0.80% to settle at 9,285.30.

Nifty May 2017 futures closed at 9316.70 on Friday at a premium of 31.40 points over spot closing of 9285.30, while Nifty June 2017 futures ended at 9317.55, at a premium of 32.25 points over spot closing. Nifty May futures saw a contraction of 0.86 million (mn) units, taking the total outstanding open interest (OI) to 19.68 million (mn) units. The near month derivatives contract will expire on May 25, 2017.

From the most active contracts, State Bank of India May 2017 futures traded at a premium of 0.45 points at 296.40 compared with spot closing of 295.95. The numbers of contracts traded were 39,573.

Canara Bank May 2017 futures traded at a discount of 5.90 points at 386.10 compared with spot closing of 392.00. The numbers of contracts traded were 34,849.

ICICI Bank May 2017 futures traded at a premium of 1.30 points at 299.30 compared with spot closing of 298.00. The numbers of contracts traded were 32,370.

Punjab National Bank May 2017 futures traded at a discount of 1.35 points at 172.85 compared with spot closing of 174.20. The numbers of contracts traded were 30,075.

Bank of Baroda May 2017 futures traded at a premium of 0.90 points at 188.40 compared with spot closing of 187.50. The numbers of contracts traded were 27,153.

Among Nifty calls, 9400 SP from the May month expiry was the most active call with an addition of 0.97 million open interests. Among Nifty puts, 9300 SP from the May month expiry was the most active put with a contraction of 0.82 million open interests. The maximum OI outstanding for Calls was at 9400 SP (5.48 mn) and that for Puts was at 9300 SP (4.89 mn). The respective Support and Resistance levels of Nifty are: Resistance 9350.93--- Pivot Point 9311.47--- Support --- 9245.83.

The Nifty Put Call Ratio (PCR) finally stood at 1.02 for May month contract. The top five scrips with highest PCR on OI were Balkrishna Industries (3.00), Infibeam Incorporation (1.91), Hero Motocorp (1.36), MRF (1.33) and Britannia Industries (1.15).

Among most active underlying, State Bank of India witnessed a contraction of 2.70 million units of Open Interest in the May month futures contract, followed by Canara Bank witnessing a contraction of 1.84 million units of Open Interest in the May  month contract, ICICI Bank witnessed a contraction of 3.63 million units of Open Interest in the May month contract, The Federal Bank witnessed a contraction of 1.70 million units of Open Interest in the May  month future contract and Reliance Industries witnessed an addition of 1.07 million units of Open Interest in the May month future contract.