Nifty falls over 1%; settles near day’s low

Indian local benchmark Nifty closed the session near day’s low on Wednesday, falling over 1 per cent on the back of selling pressure witnessed across the sectors. The index, which started in green, soon entered into red and continued its downward trend till end with report stating that the collections under the GST in August slowed down by 3.6 percent to Rs 90,669 crore, than the revised mop-up of Rs 94,063 crore in July.  Some concerns also came with the report stating that India has been ranked as the 40th most competitive economy -- slipping one place from last year's ranking -- on the World Economic Forum's global competitiveness index, which is topped by Switzerland.  Expectations of a rate hike by the US Federal Reserve and lingering North Korean worries also dented risk appetite. Traders failed to get relief with Niti Aayog Vice Chairman Rajiv Kumar’s statement that the extra fiscal stimulus will help the economy do well and there is no harm in relaxing the fiscal deficit target to allow for more capital expenditure in order to lift the slowing Indian economy. On the sectoral front, stock of pharma companies traded lower as concerned flagged with rating agency India Ratings and Research’s latest report that weak economic and political conditions in Africa, currency volatility in Latin America and a weak recovery in CIS countries are likely to affect medium-term growth of Indian pharmaceutical exporters.

All the sectoral indices ended in red on the NSE. The top gainers from the F&O segment were Shriram Transport Finance Company, Bharti Infratel and InterGlobe Aviation. On the other hand, the top losers were Divi's Laboratories, Siemens and JSW Energy. In the index option segment, maximum OI continues to be seen in the 9800-10300 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 7.23% and reached 13.86. The 50-share Nifty was down by 135.75 points or 1.38% to settle at 9,735.75.

Nifty September 2017 futures closed at 9739.65 on Wednesday at a premium of 3.90 points over spot closing of 9735.75, while Nifty October 2017 futures ended at 9772.30 at a premium of 36.55 points over spot closing. Nifty September futures saw a contraction of 3.41 million (mn) units, taking the total outstanding open interest (OI) to 14.23 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 9.70 point at 850.90 compared with spot closing of 860.60. The numbers of contracts traded were 37,703.

Reliance Industries September 2017 futures traded at a premium of 2.05 points at 800.45 compared with spot closing of 798.40. The numbers of contracts traded were 26,194.

HDFC Bank September 2017 futures traded at a discount of 6.10 points at 1774.45 compared with spot closing of 1,780.55. The numbers of contracts traded were 24,709.

Sun Pharmaceutical Industries September 2017 futures traded at a premium of 1.65 points at 494.20 compared with spot closing of 492.55. The numbers of contracts traded were 24,694.

Infosys September 2017 futures traded at a premium of 3.60 points at 899.50 compared with spot closing of 895.90. The numbers of contracts traded were 19,500.

Among Nifty calls, 9900 SP from the September month expiry was the most active call with an addition of 0.87 million open interests. Among Nifty puts, 9,800 SP from the September month expiry was the most active put with a contraction of 2.05 million open interests.  The maximum OI outstanding for Calls was at 9900 SP (5.88 mn) and that for Puts was at 9700 SP (3.77 mn). The respective Support and Resistance levels of Nifty are: Resistance 9866.40--- Pivot Point 9790.40--- Support --- 9659.75.

The Nifty Put Call Ratio (PCR) finally stood at 0.66 for September month contract. The top five scrips with highest PCR on OI were the Ramco Cements (3.05), Oracle Financial Services Software (1.81), Dewan Housing Finance Corporation (1.69), Indiabulls Real Estate (1.57) and KPIT Technologies (1.46).

Among most active underlying, Divi's Laboratories witnessed a contraction of 1.82 million units of Open Interest in the September month futures contract, followed by Reliance Industries witnessing a contraction of 12.00 million units of Open Interest in the September month contract, Tata Steel  witnessed a contraction of 4.47 million units of Open Interest in the September month contract, State Bank of India witnessed a contraction of  15.22 million units of Open Interest in the September month contract and Maruti Suzuki India witnessed a contraction of 0.44 million units of Open Interest in the September month future contract.