Nifty ends lower with minor losses

Key equity benchmark Nifty traded with volatility and ended with minor losses of around 9 points on Wednesday, as investors remained cautious ahead of release of Q2-FY18 GDP data tomorrow. The index traded in green for the most part of the session with taking some support from Prime Minister Narendra Modi’s statement that India has emerged as one of the fastest-growing economies and a happening place with immense opportunities in a number of areas. Separately, ministry of finance said that India’s Insolvency and Bankruptcy Code (IBC) ordinance, promulgated by the President, will pave the way for clean business by putting a premium on integrity. However, volatility ahead of November derivatives expiry tomorrow, pushed the Nifty below neutral line. The market failed to hold gains also because of a private report which highlighted that both goods and services tax (GST) collections as well as its compliance in the first four months since the rollout of the new tax regime remain well be below the target, and the situation is unlikely to improve in the near- term. Besides, foreign brokerage firm’s report which has lowered India’s GDP growth forecast for current fiscal to 6.6 percent from the previous 6.8 percent, citing that businesses were still adjusting to the new GST regime and there was limited room for fiscal support, too weighed on the domestic sentiments.

Traders were seen piling up positions in Auto, Realty and FMCG stocks, while selling was witnessed in Media, IT and Metal stocks. The top gainers from the F&O segment were Granules India, Bosch and Hexaware Technologies. On the other hand, the top losers were Steel Authority of India, DCB Bank and Reliance Communications. In the index option segment, maximum OI continues to be seen in the 10300-10800 calls and 9900-10400 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 0.67% and reached 13.06. The 50-share Nifty was down by 8.95 points or 0.09% to settle at 10,361.30.

Nifty November 2017 futures closed at 10360.70 on Wednesday, at a discount of 0.60 points over spot closing of 10361.30, while Nifty December 2017 futures ended at 10399.45, at a premium of 38.15 points over spot closing. Nifty November futures saw a contraction of 1.96 million (mn) units, taking the total outstanding open interest (OI) to 14.07 mn units. The near month derivatives contract will expire on November 30, 2017.

From the most active contracts, Sun Pharmaceutical Industries November 2017 futures traded at a discount of 0.55 point at 547.80 compared with spot closing of 548.35. The numbers of contracts traded were 19,922.

Axis Bank November 2017 futures traded at a premium of 1.25 points at 549.75 compared with spot closing of 548.50. The numbers of contracts traded were 19,202.

Infosys November 2017 futures traded at a discount of 0.40 points at 983.10 compared with spot closing of 983.50. The numbers of contracts traded were 16,654.

Tata Motors November 2017 futures traded at a premium of 2.35 points at 414.85 compared with spot closing of 412.50. The numbers of contracts traded were 16,044.
 
ICICI Bank November 2017 futures traded at a premium of 0.85 points at 315.00 compared with spot closing of 314.15. The numbers of contracts traded were 14,904.

Among Nifty calls, 10400 SP from the November month expiry was the most active call with an addition of 0.16 million open interests. Among Nifty puts, 10300 SP from the November month expiry was the most active put with a contraction of 0.26 million open interests.  The maximum OI outstanding for Calls was at 10500 SP (7.39 mn) and that for Puts was at 10000 SP (5.61 mn). The respective Support and Resistance levels of Nifty are: Resistance 10387.53--- Pivot Point 10366.72--- Support --- 10340.48.

The Nifty Put Call Ratio (PCR) finally stood at 0.98 for November month contract. The top five scrips with highest PCR on OI were Godrej Consumer Products (5.07), JSW Energy (2.53), Maruti Suzuki India (1.61), Repco Home Finance (1.31) and Voltas (1.30).

Among most active underlying, Reliance Industries witnessed a contraction of 7.57 million units of Open Interest in the November month futures contract, followed by State Bank of India witnessing  a contraction of 6.35 million units of Open Interest in the November month contract, Axis Bank witnessed a contraction of 10.34 million units of Open Interest in the November month contract, ICICI Bank  witnessed a contraction of  23.20 million units of Open Interest in the November month contract and Tata Steel witnessed  a contraction of 5.49 million units of Open Interest in the November month future contract.