Nifty ends lower for fifth straight day; settles below 9,750 mark

Indian equity benchmark -- Nifty -- experienced a fifth day consecutive sell off and closed the day in negative territory at 9,710.80 on Friday, as the ongoing cross-border tensions between the United States and North Korea continued to weigh on the sentiments. A falling rupee and weak earnings updates from prominent public sector banks, also contributed to the losses. Traders remained concerned with the report that the Reserve Bank of India (RBI) has halved its dividend payout to the government to Rs 30,659 crore for the fiscal ended June 2017. Last fiscal, the RBI had transferred Rs 65,876 crore surplus as dividend to the government. This would potentially impact the government’s fiscal math this financial year, which is under pressure due to state-run banks’ sluggish earnings growth. Sentiments also got affected after the finance ministry in its mid-year economic survey, said that there are downside risks to the Indian government’s growth forecast of 6.75-7.5% for the fiscal year to March 2018.

All sectoral indices on the NSE ended in red except pharma. The top gainers from the F&O segment were CG Power and Industrial Solutions, BEML and Jindal Steel & Power. On the other hand, the top losers were Indo Count Industries, Manappuram Finance and Jaiprakash Associates. In the index option segment, maximum OI continues to be seen in the 9900-10500 calls and 9400-10000 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 10.09% and reached 15.19. The 50-share Nifty was down by 109.45 points or 1.11% to settle at 9,710.80.

Nifty August 2017 futures closed at 9741.05 on Friday at a premium of 30.25 points over spot closing of 9710.80, while Nifty September 2017 futures ended at 9772.30 at a premium of 61.50 points over spot closing. Nifty August futures saw an addition of 0.78 million (mn) units, taking the total outstanding open interest (OI) to 23.31 million (mn) units. The near month derivatives contract will expire on August 31, 2017.

From the most active contracts, State Bank of India August 2017 futures traded at a premium of 0.90 points at 281.25 compared with spot closing of 280.35. The numbers of contracts traded were 72,285.

Reliance Industries August 2017 futures traded at a premium of 9.05 points at 1554.55 compared with spot closing of 1545.50. The numbers of contracts traded were 19,408.

Yes Bank August 2017 futures traded at a premium of 6.70 points at 1746.70 compared with spot closing of 1740.00. The numbers of contracts traded were 18,702.

Hindalco Industries August 2017 futures traded at a discount of 0.10 points at 222.15 compared with spot closing of 222.25. The numbers of contracts traded were 18,617.

Vedanta August 2017 futures traded at a premium of 0.35 points at 279.70 compared with spot closing of 279.35. The numbers of contracts traded were 17,626.

Among Nifty calls, 10000 SP from the August month expiry was the most active call with an addition of 0.35 million open interests. Among Nifty puts, 9700 SP from the August month expiry was the most active put with a contraction of 0.03 million open interests. The maximum OI outstanding for Calls was at 10000 SP (5.47 mn) and that for Puts was at 9500 SP (4.48 mn). The respective Support and Resistance levels of Nifty are: Resistance 9759.78--- Pivot Point 9722.67--- Support --- 9673.68.

The Nifty Put Call Ratio (PCR) finally stood at 0.84 for August month contract. The top five scrips with highest PCR on OI were Nestle India (2.00), Infibeam Incorporation (1.62), BOSCH (1.50), Indiabulls Real Estate (1.14) and Bajaj Finance (1.11).

Among most active underlying, State Bank of India witnessed an addition of 9.00 million units of Open Interest in the August month futures contract, followed by Tata Steel witnessing an addition of 0.16 million units of Open Interest in the August month contract, Reliance Industries witnessed a contraction of 0.41 million units of Open Interest in the August month contract, Vedanta witnessed a contraction of 0.43 million units of Open Interest in the August month contract and Hindalco Industries witnessed a contraction of 0.75 million units of Open Interest in the August month future contract.