Nifty ends lower on first day of New Year

Key Indian benchmarks Nifty ended first day of the New Year in red, with the losses of 0.90 per cent, in the absence of cues from other Asian and European markets that remained closed for public holiday. The index traded on a lackluster note throughout the session, as India’s fiscal deficit breached FY18 target at Nov-end by standing at 112% of Budget Estimates. The country’s fiscal deficit, the difference between government expenditure and revenue, stood at Rs 6.12 lakh crore for the period April-November 2017-18. Some concerns also came with the report stating that India’s external debt position surged by around 2.1 percent to $495.7 billion during July-September quarter (Q2 FY18), as compared to $485.8 billion reported for the end-June period. Traders took note of Finance Minister Arun Jaitley’s statement that the Indian economy slowed down in 2016-17, with the gross domestic product declining drastically from 8 percent in 2015-16 to 7.1 percent the next year. In the last leg of the trade, the Nifty extended losses and crashed like house of cards, as traders opted to book profit ahead of December Manufacturing PMI data which is scheduled to be released on January 02, 2018. Traders failed to get any relief with Commerce Minister Suresh Prabhu’s assurance to formulate a national policy for retail trade to bring all verticals, including small business, big retail, e- commerce and direct selling under it.

All the sectoral indices ended in red on the NSE except Realty. The top gainers from the F&O segment were Reliance Naval and Engineering, Reliance Power and Reliance Capital. On the other hand, the top losers were Jaiprakash Associates, Idea Cellular and Reliance Communications. In the index option segment, maximum OI continues to be seen in the 10400-11000 calls and 10000-10500 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 5.39% and reached 13.35. The 50-share Nifty was down by 95.15 points or 0.90% to settle at 10,435.55.

Nifty January 2018 futures closed at 10498.70 on Monday, at a premium of 63.15 points over spot closing of 10435.55, while Nifty February 2018 futures ended at 10521.20, at a premium of 85.65 points over spot closing. Nifty January futures saw a contraction of 0.69 million (mn) units, taking the total outstanding open interest (OI) to 22.57 mn units. The near month derivatives contract will expire on January 25, 2018.

From the most active contracts, Reliance Capital January 2018 futures traded at a discount of 2.75 points at 602.00 compared with spot closing of 604.75. The numbers of contracts traded were 32,848.

Reliance Power January 2018 futures traded at a discount of 0.30 points at 60.95 compared with spot closing of 61.25. The numbers of contracts traded were 24,138.

Reliance Infrastructure January 2018 futures traded at a premium of 4.10 points at 576.10 compared with spot closing of 572.00. The numbers of contracts traded were 21,863.

Tata Motors January 2018 futures traded at a premium of 2.35 points at 426.85 compared with spot closing of 424.50. The numbers of contracts traded were 14,438.

Reliance Naval and Engineering January 2018 futures traded at a discount of 2.95 points at 65.45 compared with spot closing of 68.40. The numbers of contracts traded were 13,964.

Among Nifty calls, 10600 SP from the January month expiry was the most active call with an addition of 0.62 million open interests. Among Nifty puts, 10500 SP from the January month expiry was the most active put with a contraction of 0.06 million open interests.  The maximum OI outstanding for Calls was at 11000 SP (4.12 mn) and that for Puts was at 10300 SP (4.71 mn). The respective Support and Resistance levels of Nifty are: Resistance 10507.90--- Pivot Point 10465.50--- Support --- 10393.15.

The Nifty Put Call Ratio (PCR) finally stood at 1.13 for January month contract. The top five scrips with highest PCR on OI were the Ramco Cements (3.55), Repco Home Finance (2.40), SREI Infrastructure Finance (1.95), BOSCH (1.27) and Rural Electrification Corporation (1.23).

Among most active underlying, Reliance Power witnessed an addition of 1.56 million units of Open Interest in the January month futures contract, followed by Reliance Infrastructure witnessing  an addition of 0.41 million units of Open Interest in the January month contract, Reliance Capital witnessed an addition of 0.48 million units of Open Interest in the January month contract, Maruti Suzuki India witnessed an addition of  0.04 million units of Open Interest in the January month contract and Tata Motors witnessed  a contraction of 0.55 million units of Open Interest in the January month future contract.