Nifty ends lower; settles below 10,350 mark

The local benchmark Nifty ended lower on Tuesday, retreating from record high hit in the previous session, as investors booked profits in metals, automobile and IT stocks. The index traded in red territory throughout the day, as concerns spread among investors with Credit rating agency Care Ratings’ latest report stating that employment generation in the country has failed to keep pace with the gross domestic product (GDP) expansion in recent years. The market participants also awaited more corporate earnings and outcome of FOMC’s two-day policy meeting that will begin tonight. The market continued its lackluster trade till the end of the day, despite SBI Research’s report that Indian economy is likely to improve to 6 percent in the second quarter of the current fiscal year 2017-18, as against 5.7 percent growth in the first quarter of FY18. Besides, Finance Secretary Ashok Lavasa statement that India’s fiscal deficit is on the path of recovery, with showing an ease of about 90 percent of the budget estimate for the full year at the end of September from the level of 96.1 percent at the end of August, too failed to provide support.

Traders were seen piling up positions in Realty, FMCG and Financial Services stocks, while selling was witnessed in PSU Banking, Metal and Media stocks. The top gainers from the F&O segment were Reliance Communications, Axis Bank and DLF. On the other hand, the top losers were Union Bank of India, IDBI Bank and Power Finance Corporation. In the index option segment, maximum OI continues to be seen in the 10300-10700 calls and 9800-10300 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 2.70% and reached 12.44. The 50-share Nifty was down by 28.35 points or 0.27% to settle at 10,335.30.

Nifty November 2017 futures closed at 10368.50 on Tuesday at a premium of 33.20 points over spot closing of 10335.30, while Nifty December 2017 futures ended at 10406.20 at a premium of 70.90 points over spot closing. Nifty November futures saw an addition of 0.26 million (mn) units, taking the total outstanding open interest (OI) to 23.74 mn units. The near month derivatives contract will expire on November 30, 2017.

From the most active contracts, Axis Bank November 2017 futures traded at a discount of 2.15 point at 523.10 compared with spot closing of 525.25. The numbers of contracts traded were 50,665.

Tata Steel November 2017 futures traded at a premium of 5.30 points at 708.85 compared with spot closing of 703.55. The numbers of contracts traded were 43,493.

Dr. Reddy's Laboratories November 2017 futures traded at a premium of 12.40 points at 2440.60 compared with spot closing of 2428.20. The numbers of contracts traded were 23,990.

DLF November 2017 futures traded at a premium of 0.45 points at 202.15 compared with spot closing of 201.70. The numbers of contracts traded were 18,800.

ICICI Bank November 2017 futures traded at a discount of 0.50 points at 299.50 compared with spot closing of 300.00. The numbers of contracts traded were 13,429.

Among Nifty calls, 10500 SP from the November month expiry was the most active call with an addition of 0.08 million open interests. Among Nifty puts, 10300 SP from the November month expiry was the most active put with an addition of 0.15 million open interests.  The maximum OI outstanding for Calls was at 10400 SP (3.24 mn) and that for Puts was at 10000 SP (5.05 mn). The respective Support and Resistance levels of Nifty are: Resistance 10360.68--- Pivot Point 10342.32--- Support --- 10316.93.

The Nifty Put Call Ratio (PCR) finally stood at 1.26 for November month contract. The top five scrips with highest PCR on OI were Repco Home Finance (7.89), Cholamandalam Investment and Finance Company (6.23), Apollo Hospitals Enterprise (1.72), JSW Energy (1.54) and Nestle India (1.50).

Among most active underlying, Tata Steel witnessed an addition of 0.91 million units of Open Interest in the November month futures contract, followed by Axis Bank witnessing  a contraction of 1.65 million units of Open Interest in the November month contract, DLF witnessed a contraction of 0.27 million units of Open Interest in the November month contract, State Bank of India witnessed an addition of  2.14 million units of Open Interest in the November month contract and Dr. Reddy's Laboratories witnessed  an addition of 0.05 million units of Open Interest in the November month future contract.