Nifty ends tad lower ahead of Fed decision

The local benchmark -- Nifty -- settled the day marginally down by 6.40 points on Wednesday as investors remained on the sidelines ahead of the outcome of US Federal Reserve's policy meeting, which will conclude later in the day. Though, the index made a positive start, it kept altering between positive and negative territory throughout the day and ended in red as SBI’s Research report flagged concerns, stating that economy has been on a downslide since September 2016 and the slowdown is real and not technical, and called for more public spending to arrest the slide. Besides, a mixed lead from global markets also kept the investors nervous. However, losses were limited with World Bank India chief Junaid Ahmad’s statement that the new tax regime has potential to boost the growth rate of the country if it is implemented efficiently and may take the county closer towards 8 per cent plus growth rate. Junaid Ahmad, further highlighting the positive impact of GST, said that the economic corridors of India will change on the back of the new tax regime, though he expressed need transportation system, particular multi- modal, in order to respond what GST is offering as one market. Besides, some shares of steel companies traded higher with domestic credit rating agency, ICRA’s latest report that Indian steel mills are likely to enjoy better profitability in the near term with firm prices of metal and substantial export growth.

Traders were seen piling up positions in FMCG, PSU Banking and Pharma stocks, while selling was witnessed in Realty, Auto and Media stocks. The top gainers from the F&O segment were Divi's Laboratories, the South Indian Bank and the Karnataka Bank. On the other hand, the top losers were BEML, ICICI Prudential Life Insurance Company and Idea Cellular. 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 increased by 1.46% and reached 11.63. The 50-share Nifty was down by 6.40 points or 0.06% to settle at 10,141.15.

Nifty September 2017 futures closed at 10167.55 on Wednesday at a premium of 26.40 points over spot closing of 10141.15, while Nifty October 2017 futures ended at 10201.25 at a premium of 60.10 points over spot closing. Nifty September futures saw an addition of 0.38 million (mn) units, taking the total outstanding open interest (OI) to 20.88 mn units. The near month derivatives contract will expire on September 28, 2017.

From the most active contracts, Divi's Laboratories September 2017 futures traded at a discount of 1.60 points at 943.60 compared with spot closing of 945.20. The numbers of contracts traded were 48,282.

Tata Steel September 2017 futures traded at a premium of 1.15 points at 688.60 compared with spot closing of 687.45. The numbers of contracts traded were 23,300.

Reliance Industries September 2017 futures traded at a premium of 2.65 points at 850.65 compared with spot closing of 848.00. The numbers of contracts traded were 21,283.

Bank of Baroda September 2017 futures traded at a premium of 0.30 points at 148.40 compared with spot closing of 148.10. The numbers of contracts traded were 15,032.

Dr. Reddy's Laboratories September 2017 futures traded at a discount of 2.60 points at 2322.40 compared with spot closing of 2325.00. The numbers of contracts traded were 14,135.

Among Nifty calls, 10200 SP from the September month expiry was the most active call with an addition of 0.01 million open interests. Among Nifty puts, 10100 SP from the September month expiry was the most active put with a contraction of 0.27 million open interests. The maximum OI outstanding for Calls was at 10200 SP (5.60 mn) and that for Puts was at 10000 SP (5.69 mn). The respective Support and Resistance levels of Nifty are: Resistance 10163.40--- Pivot Point 10148.80--- Support --- 10126.55.

The Nifty Put Call Ratio (PCR) finally stood at 1.50 for September month contract. The top five scrips with highest PCR on OI were the Ramco Cements (2.48), Oracle Financial Services Software (1.81), Indiabulls Real Estate (1.58), Dewan Housing Finance Corporation (1.25) and Kajaria Ceramics (1.09).

Among most active underlying, Divi's Laboratories witnessed an addition of 0.08 million units of Open Interest in the September month futures contract, followed by Tata Steel witnessing an addition of 1.46 million units of Open Interest in the September month contract, Reliance Industries witnessed a contraction of 0.39 million units of Open Interest in the September month contract, State Bank of India witnessed a contraction of  2.60 million units of Open Interest in the September month contract and Larsen & Toubro witnessed an addition of 0.06 million units of Open Interest in the September month future contract.