Nifty settles in red; holds 9600 mark

After trading under pressure throughout the day, Indian equity benchmark -- Nifty -- settled the session half a percent lower on Monday, holding its crucial psychological level of 9600, as traders remained wary ahead of IIP and inflation data due later in the day. Domestic investors were also cautious ahead of the US Federal Reserve policy meeting this week. Sentiments remained downbeat with the State Bank of India’s report that demonetisation may continue to result in slowing down of the economy and adversely affect its business. It further said that the long-term impact of this move on the Indian economy and the banking sector is uncertain. Some concerns also came with the private report stating that farm loan waivers are populist actions and frequent occurrence of such populist actions may lead to risks of impaired credit discipline and weak risk-reward for banks and reduced credit availability for borrowers. Furthermore, the banking stocks continued its nervousness even after Finance Minister Arun Jaitley said that the RBI is at a fairly advanced stage of preparing a list of borrowers where NPA resolution is required under the insolvency law and action on this front is expected soon.

Traders were seen piling up positions only in IT and Phrama stocks, while selling was witnessed in Banking, Auto and Media stocks.  The top gainers from the F&O segment were GMR Infrastructure, Motherson Sumi Systems and Piramal Enterprises. On the other hand, the top losers were Bharat Financial Inclusion, Tata Communications and Union Bank of India. 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 5.16% and reached 11.42. The 50-share Nifty was down by 51.85 points or 0.54% to settle at 9,616.40.

Nifty June 2017 futures closed at 9620.15 on Monday at a premium of 3.75 points over spot closing of 9616.40, while Nifty July 2017 futures ended at 9639.85, at a premium of 23.45 points over spot closing. Nifty June futures saw a contraction of 0.19 million (mn) units, taking the total outstanding open interest (OI) to 21.80 million (mn) units. The near month derivatives contract will expire on June 29, 2017.

From the most active contracts, Infosys June 2017 futures traded at a premium of 3.85 points at 968.25 compared with spot closing of 964.40. The numbers of contracts traded were 18,841.

Vedanta June 2017 futures traded at a premium of 1.25 points at 245.90 compared with spot closing of 244.65. The numbers of contracts traded were 14,560.

Sun Pharmaceutical Industries June 2017 futures traded at a premium of 2.25 point at 534.20 compared with spot closing of 531.95. The numbers of contracts traded were 13,837.

Tata Steel June 2017 futures traded at a premium of 1.20 points at 509.30 compared with spot closing of 508.10. The numbers of contracts traded were 12,325.

Yes Bank June 2017 futures traded at a premium of 3.10 points at 1490.25 compared with spot closing of 1487.15. The numbers of contracts traded were 11,675.

Among Nifty calls, 9700 SP from the June month expiry was the most active call with an addition of 0.62 million open interests. Among Nifty puts, 9600 SP from the June month expiry was the most active put with a contraction of 0.92 million open interests. The maximum OI outstanding for Calls was at 9700 SP (6.24 mn) and that for Puts was at 9500 SP (7.14 mn). The respective Support and Resistance levels of Nifty are: Resistance 9642.80--- Pivot Point 9620.65--- Support --- 9594.25.

The Nifty Put Call Ratio (PCR) finally stood at 1.12 for June month contract. The top five scrips with highest PCR on OI were Amara Raja Batteries (2.53), Oriental Bank of Commerce (1.87), HDFC Bank (1.59), Maruti Suzuki India (1.36), and Cipla (1.22).

Among most active underlying, Tata Steel  witnessed a contraction of 0.35 million units of Open Interest in the June month futures contract, followed by Maruti Suzuki India witnessing a contraction of 0.15 million units of Open Interest in the June  month contract, Vedanta witnessed an addition of 0.11 million units of Open Interest in the June month contract, Larsen & Toubro witnessed an addition of 0.08 million units of Open Interest in the June  month future contract and State Bank of India witnessed a contraction of 2.24 million units of Open Interest in the June month future contract.