Nifty falls amid geopolitical tensions; ends below 9,950 mark

Indian local benchmark -- Nifty -- ended the session with losses of more than half a percent on Monday, in line with Asian markets, as North Korea’s latest nuclear test prompted investors to seek refuge in safe havens such as gold. The index started on a cautious note and continued its weak performance till the end of the session with the foreign brokerage’s report that investment continued to slip to 27.5 percent of GDP, from 29.2 percent in June 2016, with high lending rates dampening demand and sustaining excess capacity. Investors also took note of report stating that India’s total public debt (excluding liabilities under the public account) increased by 3.6 percent to Rs 63.35 lakh crore at the end of June 2017. The debt of the government was Rs 61.13 lakh crore at the end of March 2017. Some concern also came with the private report highlighting that global brokerage firm lowered India’s GDP growth forecast to 6.6 percent for this fiscal from 7.2 percent earlier. However, it also said that the growth is expected to pick up in coming quarters as the economy normalizes post implementation of the GST. Meanwhile, in order to fastrack dispute resolutions, the department of industrial policy and promotion (DIPP) has asked Ministry of Law & Justice to help set up commercial courts at the district level. The aim is to improve India’s ranking on World Bank’s ease of doing business index.

Traders were seen piling up positions in Metal and Media stocks, while selling was witnessed in Realty, IT and FMCG stocks. The top gainers from the F&O segment were TV18 Broadcast, Raymond and Sun TV Network. On the other hand, the top losers were Adani Power, Just Dial and Reliance Capital. In the index option segment, maximum OI continues to be seen in the 9800-10500 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 12.76% and reached 13.16. The 50-share Nifty was down by 61.55 points or 0.62% to settle at 9,912.85.

Nifty September 2017 futures closed at 9927.65 on Monday at a premium of 14.80 points over spot closing of 9912.85, while Nifty October 2017 futures ended at 9955.75 at a premium of 42.90 points over spot closing. Nifty September futures saw an addition of 0.54 million (mn) units, taking the total outstanding open interest (OI) to 17.45 mn units. The near month derivatives contract will expire on September 28, 2017.

From the most active contracts, Reliance Capital September 2017 futures traded at a premium of 2.10 points at 820.10 compared with spot closing of 818.00. The numbers of contracts traded were 35,302.

Reliance Industries September 2017 futures traded at a discount of 0.80 points at 1614.20 compared with spot closing of 1615.00. The numbers of contracts traded were 24,044.

Sun TV Network September 2017 futures traded at a premium of 3.70 points at 808.90 compared with spot closing of 805.20. The numbers of contracts traded were 18,095.

Sun Pharmaceutical Industries September 2017 futures traded at a premium of 0.20 points at 500.45 compared with spot closing of 500.25. The numbers of contracts traded were 16,150.

Vedanta September 2017 futures traded at a premium of 1.15 points at 316.85 compared with spot closing of 315.70. The numbers of contracts traded were 13,902.

Among Nifty calls, 10000 SP from the September month expiry was the most active call with an addition of 0.96 million open interests. Among Nifty puts, 9900 SP from the September month expiry was the most active put with a contraction of 0.22 million open interests. The maximum OI outstanding for Calls was at 10000 SP (4.46 mn) and that for Puts was at 9700 SP (4.46 mn). The respective Support and Resistance levels of Nifty are: Resistance 9980.50--- Pivot Point 9920.75--- Support --- 9853.10.

The Nifty Put Call Ratio (PCR) finally stood at 1.05 for September month contract. The top five scrips with highest PCR on OI were Torrent Pharmaceuticals (5.00), the Ramco Cements (2.75), KPIT Technologies (2.50), Indiabulls Real Estate (2.09) and Container Corporation of India (1.37).
 
Among most active underlying, Reliance Capital witnessed a contraction of 2.35 million units of Open Interest in the September month futures contract, followed by Reliance Industries witnessing an addition of 0.81 million units of Open Interest in the September month contract, Vedanta witnessed a contraction of 0.25 million units of Open Interest in the September month contract, Maruti Suzuki India witnessed an addition  of 750 units of Open Interest in the September month contract and Tata Steel witnessed a contraction of 0.47 million units of Open Interest in the September month future contract.