Nifty snaps six day gaining streak; closes flat with negative bias

Snapping six day gaining streak, Indian equity benchmark -- Nifty -- ended flat with negative bias on Wednesday, mirroring other weak Asian markets. After starting the day on a cautious note, the index remained choppy throughout the day, as investors were cautious ahead of key corporate earnings later this week and budget next month. Traders also remained on sidelines ahead of the outcome of meeting organised by government think tank NITI Aayog, and attended by a host of ministers including Finance Minister Arun Jaitley, NITI Aayog functionaries and leading economists. Besides, sentiments got hit with chief statistician TCA Anant’s statement that lower-than-expected inflation is estimated to pull down nominal GDP growth to 9.5% in FY18, against the budgeted 11-11.5%. He further added that this will impact the final projection of the FY18 fiscal deficit (expressed as a percentage of nominal GDP). Adding some concerns, ICRA’s latest report stated that credit growth of Infrastructure finance firms will remain subdued over the short term. However, in the last leg of trade, Nifty managed to trim most of its losses, amid report that the World Bank in its ‘2018 Global Economics Prospect’ report expressed hopes that India’s Gross Domestic Product will grow at 7.3 percent in the year 2018 and rise further to 7.5 percent in the following two years. The market participants also got some comfort with Union Cabinet approving key changes in India’s Foreign Direct Investment (FDI) policy by easing investment norms across sectors including aviation, construction and single brand retail among others.

Traders were seen piling up positions in Metal, Realty and IT stocks, while selling was witnessed in Financial Services, Pharma and Media stocks. The top gainers from the F&O segment were Jindal Steel & Power, Indo Count Industries and Container Corporation of India. On the other hand, the top losers were Page Industries, Muthoot Finance and Bank of India. In the index option segment, maximum OI continues to be seen in the 10400-11000 calls and 10000-10600 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 1.35% and reached 14.03. The 50-share Nifty was down by 4.80 points or 0.05% to settle at 10,632.20.

Nifty January 2018 futures closed at 10637.05 on Wednesday, at a premium of 4.85 points over spot closing of 10632.20, while Nifty February 2018 futures ended at 10656.75, at a premium of 24.55 points over spot closing. Nifty January futures saw an addition of 0.93 million (mn) units, taking the total outstanding open interest (OI) to 28.47 mn units. The near month derivatives contract will expire on January 25, 2018.

From the most active contracts, Jet Airways (India) January 2018 futures traded at a premium of 3.25 points at 845.25 compared with spot closing of 842.00. The numbers of contracts traded were 22,073.

Tata Consultancy Services January 2018 futures traded at a discount of 3.10 points at 2799.90 compared with spot closing of 2803.00. The numbers of contracts traded were 17,316.

DLF January 2018 futures traded at a premium of 1.50 points at 270.15 compared with spot closing of 268.65. The numbers of contracts traded were 15,906.

Infosys January 2018 futures traded at a premium of 0.90 points at 1053.90 compared with spot closing of 1053.00. The numbers of contracts traded were 14,442.

Tata Steel January 2018 futures traded at a premium of 0.50 points at 774.30 compared with spot closing of 773.80. The numbers of contracts traded were 14,010.

Among Nifty calls, 10700 SP from the January month expiry was the most active call with an addition of 0.66 million open interests. Among Nifty puts, 10600 SP from the January month expiry was the most active put with an addition of 0.62 million open interests.  The maximum OI outstanding for Calls was at 10700 SP (4.56 mn) and that for Puts was at 10500 SP (7.54 mn). The respective Support and Resistance levels of Nifty are: Resistance 10660.90--- Pivot Point 10626.80--- Support --- 10598.10.

The Nifty Put Call Ratio (PCR) finally stood at 1.36 for January month contract. The top five scrips with highest PCR on OI were Jindal Steel & Power (1.36), Wockhardt (1.14), Tata Steel (1.09), Tata Consultancy Services (0.98) and Torrent Pharmaceuticals (0.96).

Among most active underlying, Jet Airways (India) witnessed an addition of 0.49 million units of Open Interest in the January month futures contract, followed by Tata Consultancy Services witnessing  an addition of 0.54 million units of Open Interest in the January month contract, DLF witnessed an addition of 0.71 million units of Open Interest in the January month contract, Maruti Suzuki India witnessed an addition of  0.06 million units of Open Interest in the January month contract and Reliance Industries  witnessed  a contraction of 0.22 million units of Open Interest in the January month future contract.