Nifty ends in red; slips below 9400 mark

Indian equity benchmark -- Nifty -- ended the lackluster session below 9400 mark on Tuesday as investors booked profit in recent outperformers. Tension across the Line of Control (LoC), following punitive fire assaults by the Indian Army dragged the already weak market further in the final minutes of the session. Sentiments also remained downbeat with India Ratings and Research’s (Ind-Ra) latest report stating that Goods & Service Tax (GST) implementation will affect the working capital cycle of business in the initial phase owing to the lock up of input credit. It noted that easy liquidity in the system is essential to minimise the magnitude of such disruption at the earliest and to absorb the sudden changes in requirement of short term finance. Besides, weakness in Asian markets following a suspected terrorist attack in northern England and concerns about the ongoing political turmoil in the US also weighed on the sentiments. Meanwhile, overseas investors have pumped in more than $2 billion so far in the country’s capital market this month, helped by the stable outlook for the rupee. According to latest depository data, foreign portfolio investors (FPIs) invested a net Rs 4,157 crore in equities during May 2-19, while they poured Rs 12,941 crore in the debt markets during the period under review, translating into a net inflow of Rs 17,099 crore ($2.66 billion).

Traders were seen piling up positions only in Auto and IT stocks, while selling was witnessed in PSU, Pharma and Realty stocks. The top gainers from the F&O segment were Maruti Suzuki India, L&T Finance Holdings and Can Fin Homes.  On the other hand, the top losers were Jaiprakash Associates, Indo Count Industries and Bank of India. 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 8.93% and reached 12.20. The 50-share Nifty was down by 52.10 points or 0.55% to settle at 9,386.15.

Nifty May 2017 futures closed at 9390.45 on Tuesday at a premium of 4.30 points over spot closing of 9386.15, while Nifty June 2017 futures ended at 9395.15, at a premium of 9 points over spot closing. Nifty May futures saw a contraction of 2.50 million (mn) units, taking the total outstanding open interest (OI) to 15.30 million (mn) units. The near month derivatives contract will expire on May 25, 2017.

From the most active contracts, Sun Pharmaceutical Industries May 2017 futures traded at a discount of 1.55 points at 613.80 compared with spot closing of 615.35. The numbers of contracts traded were 29,312.

Infosys May 2017 futures traded at a premium of 1.55 points at 959.05 compared with spot closing of 957.50. The numbers of contracts traded were 28,413.

State Bank of India May 2017 futures traded at a premium of 0.35 points at 289.20 compared with spot closing of 288.85. The numbers of contracts traded were 27,709.

ICICI Bank May 2017 futures traded at a discount of 0.30 points at 305.80 compared with spot closing of 306.10. The numbers of contracts traded were 26,363.

Tata Motors May 2017 futures traded at a premium of 3.35 points at 451.25 compared with spot closing of 447.90. The numbers of contracts traded were 24,665.

Among Nifty calls, 9500 SP from the May month expiry was the most active call with an addition of 0.56 million open interests. Among Nifty puts, 9400 SP from the May month expiry was the most active put with a contraction of 1.13 million open interests. The maximum OI outstanding for Calls was at 9500 SP (6.60 mn) and that for Puts was at 9300 SP (5.42 mn). The respective Support and Resistance levels of Nifty are: Resistance 9432.80--- Pivot Point 9401.40--- Support --- 9354.75.

The Nifty Put Call Ratio (PCR) finally stood at 1.09 for May month contract. The top five scrips with highest PCR on OI were TVS Motor (1.70), Kotak Bank (1.45), CEAT (1.37), Bharti Airtel (1.36) and DLF (1.27).

Among most active underlying, State Bank of India witnessed a contraction of 12.54 million units of Open Interest in the May month futures contract, followed by Tata Steel witnessing a contraction of 3.83 million units of Open Interest in the May  month contract, Maruti Suzuki India witnessed a contraction of 0.27 million units of Open Interest in the May month contract, ICICI Bank witnessed a contraction of 4.37 million units of Open Interest in the May  month future contract and Tata Motors witnessed a contraction of 5.73 million units of Open Interest in the May month future contract.