Nifty settles with small losses

In a volatile session, Indian equity benchmark -- Nifty -- ended on a negative note on Thursday as investors maintained a cautious stance ahead of UK polls and the ECB meeting. The domestic market sentiments remained subdued after Reserve Bank of India (RBI) raised concerns over the possibility of fiscal slippages due to the farm loan waivers. RBI also cut the economic growth projection to 7.3% for the current fiscal from 7.4% earlier. Some concerns also came with Chief Economic Adviser Arvind Subramanian expressing his unhappiness over the Reserve Bank’s inflexibility on interest rates. He warned that real policy rates are becoming tighter and rising at a time of low inflation and slowing growth. However, losses remained capped with the UNCTAD’s report that India would be the top prospective foreign direct investment (FDI) destination globally after the US and China. It also said that an improved economic outlook in major Asian economies such as India, China is likely to lift investor confidence and help boost FDI inflows by about 15 percent in 2017. Besides, Prime Minister Narendra Modi said that India is today seen as a bright spot in the global economy, doing business here has been made easier and the tax regime is more predictable and stable, noting that FDI has seen a huge jump from $34,487 billion to $61,724 billion since 2013.

Traders were seen piling up positions in Pharma, Financial Services and Metal stocks, while selling was witnessed in IT, PSU and Realty stocks. The top gainers from the F&O segment were NIIT Technologies, Page Industries and Kaveri Seed Company. On the other hand, the top losers were Housing Development & Infrastructure, GAIL (India) and Oriental Bank of Commerce. 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 1.62% and reached 11.06. The 50-share Nifty was down by 16.65 points or 0.17% to settle at 9,647.25.

Nifty June 2017 futures closed at 9669.70 on Thursday at a premium of 22.45 points over spot closing of 9647.25, while Nifty July 2017 futures ended at 9688.65, at a premium of 41.40 points over spot closing. Nifty June futures saw an addition of 0.15 million (mn) units, taking the total outstanding open interest (OI) to 22.17 million (mn) units. The near month derivatives contract will expire on June 29, 2017.

From the most active contracts, Tata Steel June 2017 futures traded at a premium of 2.05 points at 500.40 compared with spot closing of 498.35. The numbers of contracts traded were 23,760.

Sun Pharmaceutical Industries June 2017 futures traded at a premium of 0.90 points at 529.90 compared with spot closing of 529.00. The numbers of contracts traded were 21,923.

Petronet LNG June 2017 futures traded at a discount of 0.65 points at 427.50 compared with spot closing of 428.15. The numbers of contracts traded were 15,479.

Axis Bank June 2017 futures traded at a premium of 3.15 points at 518.15 compared with spot closing of 515.00. The numbers of contracts traded were 11,942.

Tata Consultancy Services June 2017 futures traded at a discount of 13.10 points at 2506.90 compared with spot closing of 2520.00. The numbers of contracts traded were 11,069.

Among Nifty calls, 9700 SP from the June month expiry was the most active call with an addition of 0.45 million open interests. Among Nifty puts, 9600 SP from the June month expiry was the most active put with an addition of 0.02 million open interests. The maximum OI outstanding for Calls was at 9700 SP (5.55 mn) and that for Puts was at 9500 SP (6.51 mn). The respective Support and Resistance levels of Nifty are: Resistance 9676.80--- Pivot Point 9659.15--- Support --- 9629.60.

The Nifty Put Call Ratio (PCR) finally stood at 1.19 for June month contract. The top five scrips with highest PCR on OI were Amara Raja Batteries (2.64), Kajaria Ceramics (2.33), Oriental Bank of Commerce (1.76), V-Guard Industries (1.45) and HDFC Bank (1.20).

Among most active underlying, Tata Steel witnessed an addition of 2.50 million units of Open Interest in the June month futures contract, followed by Tata Consultancy Services witnessing an addition of 0.33 million units of Open Interest in the June  month contract, Sun Pharmaceutical Industries witnessed a contraction of 2.45 million units of Open Interest in the June month contract, ICICI Bank witnessed an addition of 2.02 million units of Open Interest in the June  month future contract and State Bank of India witnessed an addition of 0.42 million units of Open Interest in the June month future contract.