Nifty closes lower for second consecutive session

Indian equity benchmark -- Nifty -- ended the lackluster day on a negative note for second consecutive session on Thursday, on the back of negative global cues along with a selloff in banking stocks after the Reserve Bank of India yesterday slashed the repo rate by 25 basis points to 6% in its latest credit and monetary policy review. The index remained down throughout the session as concerns came with the Reserve Bank’s third bi-monthly monetary policy statement that farm loan waivers by state governments could result in possible fiscal slippages and undermine the quality of public spending. Poor service sector performance records data, also contributed to the losses. The seasonally adjusted Nikkei Services Business Activity Index fell to 45.9 in July from 53.1 in June. Some anxiety spread among the investors with the private report stating that more than 31 percent of the chief financial officers (CFOs) from various companies feel implementation of GST is challenging and manufacturing is the most affected sector.

All the sectoral indices ended in red on the NSE. The top gainers from the F&O segment were Fortis Healthcare, Bata India and Godrej Consumer Products. On the other hand, the top losers were Jindal Steel & Power, Reliance Communications and Punjab National Bank. In the index option segment, maximum OI continues to be seen in the 9900-10500 calls and 9400-10100 puts indicating this is the trading range expectation.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 2.51% and reached 11.64. The 50-share Nifty was down by 67.85 points or 0.67% to settle at 10,013.65.

Nifty August 2017 futures closed at 10043.00 on Thursday at a premium of 29.35 points over spot closing of 10013.65, while Nifty September 2017 futures ended at 10077.00 at a premium of 63.35 points over spot closing. Nifty August futures saw an addition of 0.69 million (mn) units, taking the total outstanding open interest (OI) to 21.75 million (mn) units. The near month derivatives contract will expire on August 31, 2017.

From the most active contracts, Lupin August 2017 futures traded at a premium of 12.30 points at 998.90 compared with spot closing of 986.60. The numbers of contracts traded were 33,785.

Reliance Industries August 2017 futures traded at a premium of 0.55 points at 1654.55 compared with spot closing of 1654.00. The numbers of contracts traded were 27,540.

Indian Oil Corporation August 2017 futures traded at a discount of 1.35 points at 386.60 compared with spot closing of 387.95. The numbers of contracts traded were 20,934.

Yes Bank August 2017 futures traded at a premium of 12.75 points at 1797.30 compared with spot closing of 1784.55. The numbers of contracts traded were 16,973.

Punjab National Bank August 2017 futures traded at a premium of 1.10 points at 149.90 compared with spot closing of 148.80. The numbers of contracts traded were 15,811.

Among Nifty calls, 10200 SP from the August month expiry was the most active call with an addition of 0.42 million open interests. Among Nifty puts, 10000 SP from the August month expiry was the most active put with a contraction of 0.21 million open interests. The maximum OI outstanding for Calls was at 10500 SP (4.10 mn) and that for Puts was at 10000 SP (4.62 mn). The respective Support and Resistance levels of Nifty are: Resistance 10063.78--- Pivot Point 10031.02--- Support --- 9980.88.

The Nifty Put Call Ratio (PCR) finally stood at 0.97 for August month contract. The top five scrips with highest PCR on OI were Oil India (2.75), Nestle India (2.33), Kajaria Ceramics (2.33), Infibeam Incorporation (1.55) and Bajaj Finance (1.32).

Among most active underlying, Reliance Industries witnessed an addition of 0.25 million units of Open Interest in the August month futures contract, followed by Lupin witnessing an addition of 0.93 million units of Open Interest in the August month contract, State Bank of India witnessed a contraction of 1.38 million units of Open Interest in the August month contract, Yes Bank witnessed a contraction of 0.15 million units of Open Interest in the August month future contract and Indian Oil Corporation witnessed an addition of 0.33 million units of Open Interest in the August month future contract.