Nifty ends in red; settles below 10,000 mark after 9 sessions

Indian equity benchmark -- Nifty -- extended losses for the second straight session on Tuesday, as investors were concerned after the markets watchdog SEBI directed bourses to initiate action against 331 suspected shell companies that are listed. These scrips will not be available for trading this month. The index erased all its opening gains to trade on a negative note throughout the day and ended in red below 10,000 mark after 9 sessions. Sentiments remained downbeat with the private report stating that it suspects that there has been a change in the stance by the authorities to let the rupee appreciate more, but warned that it can hurt manufacturing and exports. Some concerns also came with Engineering exporters’ body EEPC stating that shipping companies are facing difficulties post GST as their drawback refunds will not be released till September-end or October.

Traders were seen piling up positions only in metal stocks, while selling was witnessed in Realty, PSU and Pharma stocks. The top gainers from the F&O segment were PC Jeweller, Jubilant Foodworks and Century Textiles & Industries. On the other hand, the top losers were Housing Development and Infrastructure, Sintex Industries and Jaiprakash Associates.  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 increased by 7.36% and reached 12.77. The 50-share Nifty was down by 78.85 points or 0.78% to settle at 9,978.55.

Nifty August 2017 futures closed at 9999.45 on Tuesday at a premium of 20.90 points over spot closing of 9978.55, while Nifty September 2017 futures ended at 10031.80 at a premium of 53.25 points over spot closing. Nifty August futures saw an addition of 1.27 million (mn) units, taking the total outstanding open interest (OI) to 22.97 million (mn) units. The near month derivatives contract will expire on August 31, 2017.

From the most active contracts, Tata Steel August 2017 futures traded at a premium of 4.55 points at 618.55 compared with spot closing of 614.00. The numbers of contracts traded were 34,161.

Century Textiles & Industries August 2017 futures traded at a premium of 3.50 points at 1289.00 compared with spot closing of 1285.50. The numbers of contracts traded were 31,727.

Hindalco Industries August 2017 futures traded at a premium of 0.95 points at 236.35 compared with spot closing of 235.40. The numbers of contracts traded were 20,947.

Reliance Capital August 2017 futures traded at a premium of 2.70 points at 786.15 compared with spot closing of 783.45. The numbers of contracts traded were 20,894.

Vedanta August 2017 futures traded at a premium of 1.70 points at 298.80 compared with spot closing of 297.10. The numbers of contracts traded were 17,526.

Among Nifty calls, 10100 SP from the August month expiry was the most active call with an addition of 0.98 million open interests. Among Nifty puts, 10000 SP from the August month expiry was the most active put with a contraction of 0.64 million open interests. The maximum OI outstanding for Calls was at 10100 SP (4.90 mn) and that for Puts was at 10000 SP (4.67 mn). The respective Support and Resistance levels of Nifty are: Resistance 10059.23--- Pivot Point 10003.12--- Support --- 9922.43.

The Nifty Put Call Ratio (PCR) finally stood at 1.03 for August month contract. The top five scrips with highest PCR on OI were Kajaria Ceramics (2.67), Nestle India (2.00), Infibeam Incorporation (1.65), Bajaj Finance (1.40) and Dabur (1.31).

Among most active underlying, Tata Steel witnessed an addition of 0.43 million units of Open Interest in the August month futures contract, followed by Reliance Capital witnessing a contraction of 0.77 million units of Open Interest in the August month contract, Century Textiles & Industries witnessed an addition of 0.19 million units of Open Interest in the August month contract, Vedanta witnessed a contraction of 2.55 million units of Open Interest in the August month contract  and Hindalco Industries witnessed an addition of 4.28 million units of Open Interest in the August month future contract.