Nifty ends at one month closing low

Indian equity benchmark -- Nifty -- ended at one-month closing low on Thursday, as bears continued to keep tight control over the market amid geopolitical tensions surrounding North Korea. Sentiments also remained cautious with the private report stating that India’s retail inflation is expected to have picked up slightly in July after cooling in the previous three months, but likely remained well below the central bank’s 4 percent medium-term target. Investors failed to get any sense of relief with the report that direct tax collections jumped 19 per cent in the first four months of the current fiscal as demonetisation of higher denomination currency brought in more number of individuals in tax net. On the sectoral front, the banking sector shares traded lower with Care Ratings’ latest research report highlighting that the Indian banking industry continued to remain under pressure in the first quarter of current financial year because of slower pace in growth rate of credit and deposits, it added that the non performing assets (NPAs) also remained high as of June 2017.

All sectoral indices on the NSE ended in red except IT. The top gainers from the F&O segment were Indo Count Industries, Tech Mahindra and SRF. On the other hand, the top losers were Kaveri Seed Company, Adani Power and Jet Airways (India). 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 2.60% and reached 13.80. The 50-share Nifty was down by 87.80 points or 0.89% to settle at 9,820.25.

Nifty August 2017 futures closed at 9854.75 on Thursday at a premium of 34.50 points over spot closing of 9820.25, while Nifty September 2017 futures ended at 9885.90 at a premium of 65.65 points over spot closing. Nifty August futures saw a contraction of 0.73 million (mn) units, taking the total outstanding open interest (OI) to 22.53 million (mn) units. The near month derivatives contract will expire on August 31, 2017.

From the most active contracts, Tata Motors August 2017 futures traded at a discount of 0.50 points at 381.65 compared with spot closing of 382.15. The numbers of contracts traded were 33,102.

Aurobindo Pharma August 2017 futures traded at a discount of 6.65 points at 689.35 compared with spot closing of 696.00. The numbers of contracts traded were 25,408.

Sun Pharmaceutical Industries August 2017 futures traded at a premium of 1.40 points at 461.15 compared with spot closing of 459.75. The numbers of contracts traded were 22,533.

Reliance Capital August 2017 futures traded at a discount of 0.45 points at 767.85 compared with spot closing of 768.30. The numbers of contracts traded were 21,436.

State Bank of India August 2017 futures traded at a discount of 0.30 points at 297.70 compared with spot closing of 298.00. The numbers of contracts traded were 19,176.

The Nifty Put Call Ratio (PCR) finally stood at 0.85 for August month contract. The top five scrips with highest PCR on OI were Nestle India (2.00), Infibeam Incorporation (1.65), Indiabulls Real Estate (1.22), Dabur (1.11) and Bajaj Finance (1.02).

Among most active underlying, Tata Motors witnessed an addition of 0.31 million units of Open Interest in the August month futures contract, followed by Tata Steel witnessing a contraction of 0.75 million units of Open Interest in the August month contract, Reliance Capital witnessed a contraction of 0.37 million units of Open Interest in the August month contract, State Bank of India witnessed a contraction of 2.91 million units of Open Interest in the August month contract and Reliance Industries witnessed a contraction of 0.47 million units of Open Interest in the August month future contract.