Nifty ends with a percent cut; settles below 9,850 mark

Indian equity benchmark Nifty tumbled on Tuesday to close with the losses of around a percent amid heavy selling in FMCG stocks after the GST council increased compensation cess on cigarettes. Sentiments also remained dampened by weak global cues, as setbacks for a health care overhaul in the US raised doubts over prospects for a range of reforms backed by President Donald Trump. Traders remained worried with the industry body, ASSOCHAM's report that the inflation outlook is expected to remain quite muted at least till festival season of Durga Puja and Diwali. Some concerns also came with Fitch Ratings' latest report that new indirect tax regime GST will have a negative impact on oil and gas, and SME sectors. Investors paid no heed towards the private survey stating that Indian CEOs are confident about the growth prospects of the country over the next three years, compared to that of global economy.

Traders were seen piling up positions in Pharma, IT and Auto stocks, while selling was witnessed in FMCG, Realty and PSU stocks. The top gainers from the F&O segment were Sintex Industries, Infibeam Incorporation and Jubilant Foodworks. On the other hand, the top losers were ITC, TV18 Broadcast and KPIT Technologies.  In the index option segment, maximum OI continues to be seen in the 9700-10200 calls and 9300-9900 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 0.28% and reached 11.49. The 50-share Nifty was down by 88.80 points or 0.90% to settle at 9,827.15.

Nifty July 2017 futures closed at 9846.30 on Tuesday at a premium of 19.15 points over spot closing of 9827.15, while Nifty August 2017 futures ended at 9881.40 at a premium of 54.25 points over spot closing. Nifty July futures saw a contraction of 1.91 million (mn) units, taking the total outstanding open interest (OI) to 18.93 million (mn) units. The near month derivatives contract will expire on July 27, 2017.

From the most active contracts, ITC July 2017 futures traded at a premium of 0.85 points at 285.55 compared with spot closing of 284.70. The numbers of contracts traded were 66,159.

Jubilant Foodworks July 2017 futures traded at a premium of 0.95 points at 1322.95 compared with spot closing of 1322.00. The numbers of contracts traded were 22,130.

Reliance Industries July 2017 futures traded at a premium of 4.95 points at 1525.45 compared with spot closing of 1520.50. The numbers of contracts traded were 20,455.

Axis Bank July 2017 futures traded at a premium of 1.95 points at 518.25 compared with spot closing of 516.30. The numbers of contracts traded were 18,673.

State Bank of India July 2017 futures traded at a premium of 1.25 points at 291.75 compared with spot closing of 290.50. The numbers of contracts traded were 17,164.

Among Nifty calls, 9900 SP from the July month expiry was the most active call with an addition of 1.76 million open interests. Among Nifty puts, 9800 SP from the July month expiry was the most active put with a contraction of 0.58 million open interests. The maximum OI outstanding for Calls was at 10000 SP (6.71 mn) and that for Puts was at 9800 SP (5.86 mn). The respective Support and Resistance levels of Nifty are: Resistance 9877.65--- Pivot Point 9834.85--- Support --- 9784.35.

The Nifty Put Call Ratio (PCR) finally stood at 1.29 for July month contract. The top five scrips with highest PCR on OI were Indiabulls Real Estate (1.25), Ujjivan Financial Services (1.19), Bharti Airtel (1.15), Torrent Pharmaceuticals (1.14) and Jubilant FoodWorks(1.09)

Among most active underlying, ITC witnessed an addition of 2.93 million units of Open Interest in the July month futures contract, followed by Reliance Industries witnessing a contraction of 1.33 million units of Open Interest in the July month contract, Grasim Industries witnessed a contraction of 0.38 million units of Open Interest in the July month contract, State Bank of India witnessed a contraction of 3.92 million units of Open Interest in the July month future contract and Jubilant Foodworks witnessed a contraction of 0.007 million units of Open Interest in the July month future contract.