Nifty snaps four-day rally; ends just shy of 10,450 mark

Snapping four-day rally, an Indian equity benchmark -- Nifty -- ended slightly lower on Wednesday, amid weak global cues. The index started the day on a cautious note but entered into positive territory with traders taking encouragement from Commerce & Industry Minister Suresh Prabhu's statement that the government is working on a strategy to boost share of services in total exports from the country, highlighting the importance of services sector in improving the condition of exports. Some optimism also came with finance ministry's statement that the government is committed to growth revival by increasing public investment while maintaining fiscal deficit target of 3.2 per cent for the current fiscal. Separately, Finance Minister Arun Jaitley said that the Centre is in favour of bringing petroleum products under the goods and services tax (GST) regime, but is waiting for a consensus to emerge among states.  However, profit booking in last leg of trade dragged the Nifty lower. Sentiments got hit with Federation of Indian Chambers of Commerce and Industry's (FICCI) latest quarterly survey stating that manufacturing sector outlook is slightly less optimistic in third quarter of the current fiscal year (Q3), due to factors like rupee appreciation, subdued demands along with issues related to Goods and Services Tax (GST) regime.

Traders were seen piling up positions in Realty, IT and Media stocks, while selling was witnessed in Banking, Pharma and Auto stocks. The top gainers from the F&O segment were Reliance Communications, the Ramco Cements and Reliance Naval and Engineering. On the other hand, the top losers were Punjab National Bank, Bank of India and Balrampur Chini Mills. In the index option segment, maximum OI continues to be seen in the 10400-11000 calls and 9800-10400 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 0.02% and reached 12.18. The 50-share Nifty was down by 19.00 points or 0.18% to settle at 10,444.20.

Nifty December 2017 futures closed at 10470.15 on Wednesday, at a premium of 25.95 points over spot closing of 10444.20, while Nifty January 2018 futures ended at 10502.00, at a premium of 57.80 points over spot closing. Nifty December futures saw a contraction of 0.24 million (mn) units, taking the total outstanding open interest (OI) to 19.30 mn units. The near month derivatives contract will expire on December 28, 2017.

From the most active contracts, Maruti Suzuki India December 2017 futures traded at a premium of 17.90 point at 9773.30 compared with spot closing of 9755.40. The numbers of contracts traded were 32,688.

DLF December 2017 futures traded at a premium of 0.40 points at 245.80 compared with spot closing of 245.40. The numbers of contracts traded were 21,734.

Reliance Capital December 2017 futures traded at a premium of 4.10 points at 456.45 compared with spot closing of 452.35. The numbers of contracts traded were 20,863.

Tata Motors December 2017 futures traded at a premium of 0.20 points at 422.85 compared with spot closing of 422.65. The numbers of contracts traded were 19,893.
 
Tata Steel December 2017 futures traded at a premium of 1.60 points at 703.80 compared with spot closing of 702.20. The numbers of contracts traded were 19,878.

Among Nifty calls, 10500 SP from the December month expiry was the most active call with an addition of 0.27 million open interests. Among Nifty puts, 10400 SP from the December month expiry was the most active put with an addition of 0.50 million open interests.  The maximum OI outstanding for Calls was at 10500 SP (6.52 mn) and that for Puts was at 10000 SP (8.05 mn). The respective Support and Resistance levels of Nifty are: Resistance 10480.05--- Pivot Point 10458.60--- Support --- 10422.75.

The Nifty Put Call Ratio (PCR) finally stood at 1.25 for December month contract. The top five scrips with highest PCR on OI were Godrej Consumer Products (2.68), Marico (1.86), IRB Infrastructure Developers (1.68), DLF (1.41) and JSW Energy (1.37).

Among most active underlying, Maruti Suzuki India witnessed a contraction of 0.03 million units of Open Interest in the December month futures contract, followed by DLF witnessing  an addition of 1.77 million units of Open Interest in the December month contract, Tata Steel witnessed a contraction of 0.81 million units of Open Interest in the December month contract, Tata Motors witnessed a contraction of  1.82 million units of Open Interest in the December month contract and HDFC Bank witnessed  an addition of 0.34 million units of Open Interest in the December month future contract.