Nifty extends losing streak for fifth straight session

In a dismal day for the market, the local benchmark -- Nifty -- lost well over a half per cent and extended its losing streak for fifth straight session on Tuesday, as investors booked profits ahead of the rollout of new tax regime later this week. The losses were led by public sector banks, which took a hit following a report that the Reserve Bank of India (RBI) has demanded higher provisioning for loans submitted under the insolvency process. Besides, investors, who are keenly following US Fed policymakers’ statements to get a clue on which way the borrowing rates are headed, also turned cautious ahead of June expiry of derivatives contracts on Thursday. Some concerns also came with Crisil’s latest report indicating that the steps taken by Reserve Bank of India (RBI) to resolve NPAs are likely to raise provisioning by a whopping 25% this year as lenders will take up to 60% hair cut while resolving these accounts. Meanwhile, traders’ body CAIT released a white paper on Goods and Services Tax (GST) to disseminate information about the new indirect tax regime.

Traders were seen piling up positions only in FMCG stocks, while selling was witnessed in PSU, Realty and Media stocks. The top gainers from the F&O segment were Jaiprakash Associates, Adani Enterprises and Aditya Birla Nuvo.  On the other hand, the top losers were GMR Infrastructure, the India Cements and Indo Count Industries. 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 8.22% and reached 12.50. The 50-share Nifty was down by 63.55 points or 0.66% to settle at 9,511.40.

Nifty June 2017 futures closed at 9513.00 on Tuesday at a premium of 1.60 points over spot closing of 9511.40, while Nifty July 2017 futures ended at 9527.40, at a premium of 16 points over spot closing. Nifty June futures saw a contraction of 6.20 million (mn) units, taking the total outstanding open interest (OI) to 13.27 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 2.40 points at 928.40 compared with spot closing of 926.00. The numbers of contracts traded were 30,435.

Sun Pharmaceutical Industries June 2017 futures traded at a discount of 0.35 points at 544.10 compared with spot closing of 544.45. The numbers of contracts traded were 24,339.

ICICI Bank June 2017 futures traded at a premium of 0.30 points at 288.60 compared with spot closing of 288.30. The numbers of contracts traded were 23,474.

State Bank of India June 2017 futures traded at a discount of 0.10 points at 279.90 compared with spot closing of 280.00. The numbers of contracts traded were 23,338.

HDFC Bank June 2017 futures traded at a discount of 3.80 points at 1663.75 compared with spot closing of 1667.55. The numbers of contracts traded were 22,799.

Among Nifty calls, 9600 SP from the June month expiry was the most active call with an addition of 1.84 million open interests. Among Nifty puts, 9500 SP from the June month expiry was the most active put with a contraction of 0.68 million open interests. The maximum OI outstanding for Calls was at 9700 SP (8.36 mn) and that for Puts was at 9500 SP (5.13 mn). The respective Support and Resistance levels of Nifty are: Resistance 9593.38--- Pivot Point 9533.42--- Support --- 9451.43.

The Nifty Put Call Ratio (PCR) finally stood at 1 for June month contract. The top five scrips with highest PCR on OI were Amara Raja Batteries (2), Oriental Bank of Commerce (2), KPIT Technologies (1), Cipla (1) and Colgate-Palmolive (India).

Among most active underlying, State Bank of India witnessed a contraction of 11.01 million units of Open Interest in the June month futures contract, followed by Reliance Industries witnessing a contraction of 3.45 million units of Open Interest in the June  month contract, HDFC Bank witnessed a contraction of 5.00 million units of Open Interest in the June month contract, ICICI Bank witnessed a contraction of 26.40 million units of Open Interest in the June  month future contract and Tata Steel witnessed a contraction of 6.21 million units of Open Interest in the June month future contract.