Nifty settles lower as RBI keeps rates unchanged

Key Indian benchmark Nifty settled lower on Wednesday, as the Reserve Bank of India kept repo rate unchanged at 6%. The reverse repo rate under the LAF remained at 5.75%, and the marginal standing facility (MSF) rate and the bank rate at 6.25%. The index remained in the grip of bears throughout the day, amid report that India's total public debt (excluding liabilities under the public account) increased to Rs 65.65 lakh crore in the July-September quarter (Q2FY18), up by 2.53 percent over the previous quarter. Sentiments also got hit with the National Council of Applied Economic Research’s (NCAER) latest report stating that India Inc’s confidence dived due to goods and services tax (GST) trouble in the second quarter (July-September) of the current financial year. Its Business Confidence Index (BCI) fell 12.9% from the earlier quarter. Nifty extended its losses in last hour of trade and ended near the intraday low, with the losses of 74.15 points. Investors overlooked the mid-term review of the FTP which has brought in additional relief for the labour-intensive and micro, small and medium enterprises (MSME) sectors. The government has increased the incentives under the Merchandise Exports from India Scheme (MEIS) increased by 2 percent to 4 percent, while under the Services Export from India Scheme (SEIS), incentives have been increased by 2 percent.

All the sectoral indices ended in red on the NSE except IT.  The top gainers from the F&O segment were KPIT Technologies, Reliance Naval and Engineering and PC Jeweller. On the other hand, the top losers were Reliance Communications, Ajanta Pharma and Fortis Healthcare. In the index option segment, maximum OI continues to be seen in the 10200-10700 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 0.53% and reached 15.08. The 50-share Nifty was down by 74.15 points or 0.73% to settle at 10,044.10.

Nifty December 2017 futures closed at 10068.65 on Wednesday, at a premium of 24.55 points over spot closing of 10044.10, while Nifty January 2018 futures ended at 10100.50, at a premium of 56.40 points over spot closing. Nifty December futures saw an addition of 0.97 million (mn) units, taking the total outstanding open interest (OI) to 20.45 mn units. The near month derivatives contract will expire on December 28, 2017.

From the most active contracts, Reliance Industries December 2017 futures traded at a premium of 0.45 point at 929.45 compared with spot closing of 929.00. The numbers of contracts traded were 16,424.

Vedanta December 2017 futures traded at a premium of 1.25 points at 282.80 compared with spot closing of 281.55. The numbers of contracts traded were 15,718.

State Bank of India December 2017 futures traded at a premium of 1.65 points at 313.85 compared with spot closing of 312.20. The numbers of contracts traded were 13,257.

Tata Steel December 2017 futures traded at a premium of 1.10 points at 669.35 compared with spot closing of 668.25. The numbers of contracts traded were 11,354.
 
Tata Motors December 2017 futures traded at a premium of 2.75 points at 398.50 compared with spot closing of 395.75. The numbers of contracts traded were 9,467.

Among Nifty calls, 10300 SP from the December month expiry was the most active call with an addition of 0.28 million open interests. Among Nifty puts, 10000 SP from the December month expiry was the most active put with an addition of 0.01 million open interests.  The maximum OI outstanding for Calls was at 10500 SP (6.68 mn) and that for Puts was at 10000 SP (8.05 mn). The respective Support and Resistance levels of Nifty are: Resistance 10087.75--- Pivot Point 10060.55--- Support --- 10016.90.

The Nifty Put Call Ratio (PCR) finally stood at 0.81 for December month contract. The top five scrips with highest PCR on OI were Godrej Consumer Products (2.71), Berger Paints India (1.57), DLF (1.31), IRB Infrastructure Developers (1.24) and Repco Home Finance (1.17)

Among most active underlying, Reliance Industries witnessed an addition of 0.81 million units of Open Interest in the December month futures contract, followed by State Bank of India witnessing  an addition of 1.14 million units of Open Interest in the December month contract, DLF witnessed an addition of 0.25 million units of Open Interest in the December month contract, Tata Steel witnessed an addition of  0.21 million units of Open Interest in the December month contract and Maruti Suzuki India  witnessed  an addition of 0.08 million units of Open Interest in the December month future contract.