Nifty ends lower ahead of RBI policy review; slips below 9,650 mark

The local benchmark -- Nifty -- traded on a weak note throughout the session and ended lower on Tuesday, taking a breather from a record-hitting spree ahead of the Reserve Bank of India (RBI) interest rate decision tomorrow. The RBI is likely to keep interest rates unchanged at 6.25% at its review on Wednesday, but likely to sound less hawkish than the last monetary policy committee meeting. Sentiments also remained subdued after Asian markets fell amid a slew of risk factors, including escalating tensions in the Middle East, the coming testimony of the former FBI director, British elections and a European Central Bank meeting. Some concerns also came with the report that Indian companies raised around Rs 33,400 crore in May through private placement of corporate bonds, a slump of 44% from the year-ago level, for business expansion and propping up working capital needs. According to latest data available with markets regulator SEBI, firms garnered a total of Rs 33,389 crore in May 2017, lower than Rs 59,801 crore raised in the year-ago period. Investors failed to get any sense of relief with Prime Minister Narendra Modi’s statement describing Goods and Service Tax (GST) regime as a turning point for the economy. He further said that the creation of one nation, one market and one tax would greatly benefit the common man.

Traders were seen piling up positions only in IT stocks, while selling was witnessed in Realty, FMCG and Media stocks.  The top gainers from the F&O segment were Adani Enterprises, Apollo Tyres and Sintex Industries. On the other hand, the top losers were Gujarat State Fertilizers & Chemicals, PC Jeweller and Titan Company.   In the index option segment, maximum OI continues to be seen in the 9400-10000 calls and 9000-9700 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 1.07% and reached 11.13. The 50-share Nifty was down by 37.95 points or 0.39% to settle at 9637.15.

Nifty June 2017 futures closed at 9665.75 on Tuesday at a premium of 28.60 points over spot closing of 9637.15, while Nifty July 2017 futures ended at 9685.40, at a premium of 48.25 points over spot closing. Nifty June futures saw a contraction of 0.53 million (mn) units, taking the total outstanding open interest (OI) to 21.58 million (mn) units. The near month derivatives contract will expire on June 29, 2017.

From the most active contracts, State Bank of India June 2017 futures traded at a premium of 0.95 points at 288.35 compared with spot closing of 287.40. The numbers of contracts traded were 15,277.

Tata Motors June 2017 futures traded at a premium of 2.05 points at 463.75 compared with spot closing of 461.70. The numbers of contracts traded were 13,444.

Infosys June 2017 futures traded at a premium of 4.75 points at 984.75 compared with spot closing of 980.00. The numbers of contracts traded were 13,014.

Tata Consultancy Services June 2017 futures traded at a discount of 38.55 points at 2666.45 compared with spot closing of 2705.00. The numbers of contracts traded were 12,955.

Titan Company June 2017 futures traded at a premium of 1.70 points at 530.45 compared with spot closing of 528.75. The numbers of contracts traded were 12,423.

Among Nifty calls, 9700 SP from the June month expiry was the most active call with an addition of 0.56 million open interests. Among Nifty puts, 9600 SP from the June month expiry was the most active put with a contraction of 0.07 million open interests. The maximum OI outstanding for Calls was at 9700 SP (5.21 mn) and that for Puts was at 9500 SP (6.63 mn). The respective Support and Resistance levels of Nifty are: Resistance 9687.57--- Pivot Point 9658.88--- Support --- 9608.47.

The Nifty Put Call Ratio (PCR) finally stood at 1.20 for June month contract. The top five scrips with highest PCR on OI were Kajaria Ceramics (3.67), Amara Raja Batteries (2.58), Aditya Birla Nuvo (1.15), HDFC Bank (1.14) and Indraprastha Gas (1.13).

Among most active underlying, State Bank of India witnessed an addition of 0.86 million units of Open Interest in the June month futures contract, followed by Adani Enterprises witnessing an addition of 2.06 million units of Open Interest in the June  month contract, Tata Motors witnessed a contraction of 0.24 million units of Open Interest in the June month contract, Tata Steel witnessed an addition of 0.18 million units of Open Interest in the June  month future contract and Tata Consultancy Services witnessed an addition of 0.16 million units of Open Interest in the June month future contract.