Nifty ends lower for second consecutive day ahead of RBI minutes

Indian equity benchmark -- Nifty -- extended losses for the second consecutive day and closed in red near its opening level on Wednesday, as investors waited for the minutes of a central bank policy meeting held earlier this month. Investors’ sentiments remained subdued with the inclusion of Chinese mainland stocks to the MSCI index, which could lead to hundreds of billions of dollars worth of share purchases, shrinking shares of other emerging markets, including India. Some concerns also came with CARE Ratings’ latest report that the fiscal deficit estimate for 2017-18 is set to rise to 3.35% from present 3.24% of GDP, impacted by Rs 17,780-crore shortfall in non-tax revenue (NTR) target from telecom services. However, the index managed to recoup some losses with the report that India’s farm sector is poised for a boom as monsoon’s biggest threat, the El Nino phenomenon, has been completely ruled out and heavy showers in the key agricultural regions of Punjab, Haryana and Uttar Pradesh have created the right conditions for crop planting. Besides, Banks’ credit growth grew at 6.02 per cent to Rs 76,58,212 crore in the fortnight ending on June 9 from Rs 72,22,939 crore in the same period of the previous fiscal. On the sectoral front, shares of aviation companies flied high in an otherwise weak market after good growth in passenger traffic and lower crude oil prices, while a fall in global oil prices to a seven-month low caused a decline in share values of oil companies.

Traders were seen piling up positions in FMCG, Realty and PSU stocks, while selling was witnessed in Metal, IT and Auto stocks. The top gainers from the F&O segment were GMR Infrastructure, Jaiprakash Associates and JSW Energy. On the other hand, the top losers were Mahindra & Mahindra Financial Services, Oil India and Oil & Natural Gas Corporation. In the index option segment, maximum OI continues to be seen in the 9500-10000 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 2.42% and reached 10.91. The 50-share Nifty was down by 19.90 points or 0.21% to settle at 9,633.60.

Nifty June 2017 futures closed at 9655.25 on Wednesday at a premium of 21.65 points over spot closing of 9633.60, while Nifty July 2017 futures ended at 9671.40, at a premium of 37.80 points over spot closing. Nifty June futures saw a contraction of 0.07 million (mn) units, taking the total outstanding open interest (OI) to 21.00 million (mn) units. The near month derivatives contract will expire on June 29, 2017.

From the most active contracts, Reliance Industries June 2017 futures traded at a discount of 0.70 points at 1427.05 compared with spot closing of 1427.75. The numbers of contracts traded were 16,857.

Reliance Capital June 2017 futures traded at a premium of 1.95 points at 626.75 compared with spot closing of 624.80. The numbers of contracts traded were 10,931.

Larsen & Toubro June 2017 futures traded at a premium of 8.05 points at 1760.85 compared with spot closing of 1752.80. The numbers of contracts traded were 10,791.

Jet Airways (India) June 2017 futures traded at a premium of 0.05 points at 567.05 compared with spot closing of 567.00. The numbers of contracts traded were 10,495.

Tata Steel June 2017 futures traded at a premium of 2.20 points at 519.70 compared with spot closing of 517.50. The numbers of contracts traded were 10,426.

Among Nifty calls, 9700 SP from the June month expiry was the most active call with an addition of 0.05 million open interests. Among Nifty puts, 9600 SP from the June month expiry was the most active put with an addition of 0.56 million open interests. The maximum OI outstanding for Calls was at 9700 SP (6.72 mn) and that for Puts was at 9600 SP (6.53 mn). The respective Support and Resistance levels of Nifty are: Resistance 9653.17--- Pivot Point 9630.88--- Support --- 9611.32.

The Nifty Put Call Ratio (PCR) finally stood at 1.15 for June month contract. The top five scrips with highest PCR on OI were Amara Raja Batteries (2.31), Oriental Bank of Commerce (1.98), Cipla (1.22), HDFC Bank (1.19) and KPIT Technologies (1.19).

Among most active underlying, Reliance Industries witnessed a contraction of 0.60 million units of Open Interest in the June month futures contract, followed by Maruti Suzuki India witnessing an addition of 0.08 million units of Open Interest in the June  month contract, Tata Steel witnessed a contraction of 1.60 million units of Open Interest in the June month contract, Larsen & Toubro witnessed an addition of 0.33 million units of Open Interest in the June  month future contract and State Bank of India witnessed an addition of 0.57 million units of Open Interest in the June month future contract.