Nifty snaps 3-day winning streak; plummets 1%

Snapping three days winning streak, local benchmark Nifty ended Thursday's trade in red terrain, as investors locked in profits on recent gains. The weak global cues on the back of a crisis in the US following reports of Donald Trump passing on classified information to Russia, also added to the caution in domestic market. Traders also remained cautious ahead of two-day GST Council meet, which will see participation from 29 states and union territories, along with Jaitley, and senior officials from the revenue department. In the meeting Finance Ministry Arun Jaitley is likely to finalise the rates that various goods and services will attract from July 1. Some concerns also came with India Ratings and Research’s report that corporate and small & medium enterprise (SME) loans aggregating to Rs 2.60 lakh crore, which is 3.2 percent of total bank credit, could potentially be recognized as stressed loans by FY19. It further noted that Indian banks are sitting on unrecognized stressed loans worth of Rs 7.7 lakh crore. It also pegs stressed corporate and SME debt at 22 percent of total bank credit.

Traders were seen piling up positions only in IT stocks, while selling was witnessed in PSU, Realty and Metal stocks. The top gainers from the F&O segment were Cummins India, Jaiprakash Associates and Wipro. On the other hand, the top losers were CESC, IDBI Bank and JSW Steel. In the index option segment, maximum OI continues to be seen in the 9300-9700 calls and 8800-9500 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 10.81% and reached 11.78. The 50-share Nifty was down by 96.30 points or 1.01% to settle at 9,429.45.

Nifty May 2017 futures closed at 9440.70 on Thursday at a premium of 11.25 points over spot closing of 9429.45, while Nifty June 2017 futures ended at 9441.90, at a premium of 12.45 points over spot closing. Nifty May futures saw a contraction of 2.19 million (mn) units, taking the total outstanding open interest (OI) to 20.04 million (mn) units. The near month derivatives contract will expire on May 25, 2017.

From the most active contracts, CESC May 2017 futures traded at a premium of 14.10 points at 830.35 compared with spot closing of 816.25. The numbers of contracts traded were 28,449.

Tata Steel May 2017 futures traded at a premium of 1.10 points at 487.10 compared with spot closing of 486.00. The numbers of contracts traded were 24,744.

ICICI Bank May 2017 futures traded at a premium of 0.15 points at 307.65 compared with spot closing of 307.50. The numbers of contracts traded were 23,414.

Yes Bank May 2017 futures traded at a premium of 6.65 points at 1404.20 compared with spot closing of 1,397.55. The numbers of contracts traded were 21,686.

JSW Steel May 2017 futures traded at a discount of 0.20 points at 191.70 compared with spot closing of 191.90. The numbers of contracts traded were 20,875.

Among Nifty calls, 9500 SP from the May month expiry was the most active call with an addition of 0.94 million open interests. Among Nifty puts, 9400 SP from the May month expiry was the most active put with a contraction of 1.35 million open interests. The maximum OI outstanding for Calls was at 9500 SP (6.18 mn) and that for Puts was at 9300 SP (6.75 mn). The respective Support and Resistance levels of Nifty are: Resistance 9473.00--- Pivot Point 9445.55--- Support --- 9402.00.

The Nifty Put Call Ratio (PCR) finally stood at 1.30 for May month contract. The top five scrips with highest PCR on OI were Bharti Airtel (1.52), Kotak Bank (1.49), TVS Motor (1.47), Britannia Industries (1.42) and Eicher Motors (1.38).

Among most active underlying, Tata Steel witnessed a contraction of 3.53 million units of Open Interest in the May month futures contract, followed by ICICI Bank witnessing a contraction of 3.64 million units of Open Interest in the May  month contract, CESC witnessed an addition of 0.12 million units of Open Interest in the May month contract, State Bank of India witnessed a contraction of 1.92 million units of Open Interest in the May  month future contract and Yes Bank witnessed a contraction of 0.27 million units of Open Interest in the May month future contract.