Nifty snaps four day winning streak; settles below 10,100 mark

Snapping four consecutive sessions of gains, the local benchmark -- Nifty -- closed the session on a negative note on Wednesday, as investors remained cautious with report that Consumer Price Index (CPI) or retail inflation jumped to five month high of 3.36% in the month of August 2017, mainly due to an increase in foods prices and higher services costs, indicating Goods and Services Tax’s (GST’s) inflationary impact. Though, the index traded on a firm note for the most part of the day with taking support from India’s industrial output data which expanded modestly by 1.2% in July, 2017, after contracting 0.17% in June, possibly on the back of some restocking by companies following the July 1 goods and services tax (GST) rollout and a marginal uptick in the core sector. Some support also came with the private report stating that India’s GDP growth is expected to be around 7.1 per cent this fiscal following a likely pick up in industrial production as firms resort to 'restocking' post-Goods and Services Tax (GST) especially ahead of festive season. However, last hour sell off washed out all the gains to end the session in red. Besides, India Inc’s foreign direct investment (FDI) dropped 14.82 per cent to $1339.26 million during August 2017 from $1572.23 million in the same month of last year, also weighed on the sentiments.

Traders were seen piling up positions in Pharma, Banking and IT stocks, while selling was witnessed in Realty, Metal and FMCG stocks. The top gainers from the F&O segment were Reliance Defence & Engineering, Sun Pharmaceutical Industries and Tata Power Company. On the other hand, the top losers were Bharat Petroleum Corporation, Jubilant Foodworks and Hindustan Petroleum Corporation. In the index option segment, maximum OI continues to be seen in the 9900-10500 calls and 9500-10100 puts indicating this is the trading range expectation.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 0.02% and reached 11.75. The 50-share Nifty was down by 13.75 points or 0.14% to settle at 10,079.30.

Nifty September 2017 futures closed at 10091.45 on Wednesday at a premium of 12.15 points over spot closing of 10079.30, while Nifty October 2017 futures ended at 10122.80 at a premium of 43.50 points over spot closing. Nifty September futures saw an addition of 0.58 million (mn) units, taking the total outstanding open interest (OI) to 20.52 mn units. The near month derivatives contract will expire on September 28, 2017.

From the most active contracts, Sun Pharmaceutical Industries September 2017 futures traded at a discount of 5.60 points at 503.90 compared with spot closing of 509.50. The numbers of contracts traded were 31,595.

Reliance Industries September 2017 futures traded at a discount of 3.30 points at 850.10 compared with spot closing of 853.40. The numbers of contracts traded were 31,480.

Divi's Laboratories September 2017 futures traded at a discount of 7.95 points at 822.00 compared with spot closing of 829.95. The numbers of contracts traded were 30,885.

Wockhardt September 2017 futures traded at a premium of 1.95 points at 646.95 compared with spot closing of 645.00. The numbers of contracts traded were 19,090.

Jubilant Foodworks September 2017 futures traded at a discount of 13.70 points at 1324.30 compared with spot closing of 1338.00. The numbers of contracts traded were 16,928.

Among Nifty calls, 10100 SP from the September month expiry was the most active call with an addition of 0.50 million open interests. Among Nifty puts, 10000 SP from the September month expiry was the most active put with an addition of 0.58 million open interests. The maximum OI outstanding for Calls was at 10200 SP (4.12 mn) and that for Puts was at 9900 SP (6.06 mn). The respective Support and Resistance levels of Nifty are: Resistance 10119.78--- Pivot Point 10091.47--- Support --- 10050.98.

The Nifty Put Call Ratio (PCR) finally stood at 1.34 for September month contract. The top five scrips with highest PCR on OI were the Ramco Cements (2.31), Indiabulls Real Estate (2.16), Dewan Housing Finance Corporation (1.26), DCB Bank (1.16) and Container Corporation of India (1.11).

Among most active underlying, Reliance Industries witnessed a contraction of 0.88 million units of Open Interest in the September month futures contract, followed by Divi's Laboratories witnessing an addition of 1.28 million units of Open Interest in the September month contract, Sun Pharmaceutical Industries witnessed an addition of 0.96 million units of Open Interest in the September month contract, State Bank of India witnessed a contraction  of  1.25 million units of Open Interest in the September month contract and Tata Steel witnessed a contraction of 0.14 million units of Open Interest in the September month future contract.