Nifty registers losses for third consecutive day; slips below 9,950 mark

Indian local benchmark -- Nifty -- registered losses for third day in a row and slipped below 9,950 mark on Wednesday, as weakness in global stocks amid escalating geopolitical tensions between US and North Korea weighed on the sentiments. The market remained under pressure throughout the day as market regulator SEBI sent a directive to the exchanges to initiate action against 331 suspected shell companies. Investors failed to get any sense of relief even after National Stock Exchange (NSE) significantly lowered transaction charges in currency futures to bring in more liquidity in derivatives. Besides, Union Power Minister Piyush Goyal’s statement that the newly-introduced GST is crucial for promoting transparency and a corruption-free business environment in the country, too failed to comfort the investors.

All sectoral indices on the NSE ended in red. The top gainers from the F&O segment were PC Jeweller, Page Industries and Bank of India.  On the other hand, the top losers were Adani Enterprises, Kaveri Seed Company and Cadila Healthcare.  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 5.34% and reached 13.45. The 50-share Nifty was down by 70.50 points or 0.71% to settle at 9,908.05.

Nifty August 2017 futures closed at 9926.70 on Wednesday at a premium of 18.65 points over spot closing of 9908.05, while Nifty September 2017 futures ended at 9959.65 at a premium of 51.60 points over spot closing. Nifty August futures saw an addition of 0.28 million (mn) units, taking the total outstanding open interest (OI) to 23.26 million (mn) units. The near month derivatives contract will expire on August 31, 2017.

From the most active contracts, Reliance Capital August 2017 futures traded at a premium of 0.55 points at 798.55 compared with spot closing of 798.00. The numbers of contracts traded were 25,139.

Sun Pharmaceutical Industries August 2017 futures traded at a premium of 2.55 points at 475.05 compared with spot closing of 472.50. The numbers of contracts traded were 19,040.

Bank of India August 2017 futures traded at a premium of 3.15 points at 159.10 compared with spot closing of 155.95. The numbers of contracts traded were 17,258.

Reliance Industries August 2017 futures traded at a premium of 5.90 points at 1600.90 compared with spot closing of 1595.00. The numbers of contracts traded were 16,106.

State Bank of India August 2017 futures traded at a premium of 2.25 points at 303.60 compared with spot closing of 301.35. The numbers of contracts traded were 16,086.

Among Nifty calls, 10100 SP from the August month expiry was the most active call with an addition of 0.11 million open interests. Among Nifty puts, 9900 SP from the August month expiry was the most active put with a contraction of 0.05 million open interests. The maximum OI outstanding for Calls was at 10100 SP (5.02 mn) and that for Puts was at 9800 SP (4.83 mn). The respective Support and Resistance levels of Nifty are: Resistance 9954.22--- Pivot Point 9923.63--- Support --- 9877.47.

The Nifty Put Call Ratio (PCR) finally stood at 0.88 for August month contract. The top five scrips with highest PCR on OI were Kajaria Ceramics (4.33), Nestle India (2.00), Infibeam Incorporation (1.69), Indiabulls Real Estate (1.27) and Dabur (1.25).

Among most active underlying, Reliance Capital witnessed a contraction of 0.16 million units of Open Interest in the August month futures contract, followed by Tata Steel witnessing a contraction of 0.37 million units of Open Interest in the August month contract, Reliance Industries witnessed a contraction of 0.26 million units of Open Interest in the August month contract, State Bank of India witnessed an addition of 2.49 million units of Open Interest in the August month contract and Bank of India witnessed an addition of 1.69 million units of Open Interest in the August month future contract.