Nifty ends lower after volatile session

Snapping its record setting spree, Key Indian equity benchmark Nifty ended lower on Tuesday. The index traded volatile throughout the session, amid report that the overall trade deficit widened to $14880.19 million during the month under review as against $10545.99 million in December 2016, the highest in more than three years. The trade deficit during April- December 2017-18, was $114857.05 million as against $78432.18 million in the same period last year. Besides, traders took note of GST Council meet scheduled on this Thursday, which will also be the last meeting before Budget 2018. The council is likely to revise rates for electric vehicles, farm equipment, ease compliance & modify the reverse charge mechanism. However, the downside remained capped with BMI Research’s report that two Asian economies - India and Indonesia - will see a pick-up in GDP growth in 2018, reaping benefits of the economic reforms. It further noted that in the Indian context, adapting to the new GST regime, economic reforms aiding growth and recapitalisation plan for public sector banks will lead to increased investment growth and economic activity over the coming quarters. The market took some relief with International Monetary Fund (IMF) Official’s statement that India is reclaiming its place as a growth leader in the world, after witnessing the short term slowdown in economic growth. Some comfort also came with Prime Minister Narendra Modi promising more economic reforms to further improve the ease of doing business in India as he invited Israeli companies to invest here. PM further noted that India is the fastest growing economy with FDI inflows at all time high.

All the sectoral indices ended in red on the NSE except IT. The top gainers from the F&O segment were Wipro, Just Dial and HCL Technologies. On the other hand, the top losers were Indo Count Industries, the Federal Bank and Dish TV India. In the index option segment, maximum OI continues to be seen in the 10500-11100 calls and 10000-10700 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 1.54% and reached 14.08. The 50-share Nifty was down by 41.10 points or 0.38% to settle at 10,700.45.

Nifty January 2018 futures closed at 10709.55 on Tuesday, at a premium of 9.10 points over spot closing of 10700.45, while Nifty February 2018 futures ended at 10733.85, at a premium of 33.40 points over spot closing. Nifty January futures saw an addition of 0.23 million (mn) units, taking the total outstanding open interest (OI) to 29.98 mn units. The near month derivatives contract will expire on January 25, 2018.

From the most active contracts, Infosys January 2018 futures traded at a discount of 5.20 points at 1119.80 compared with spot closing of 1125.00. The numbers of contracts traded were 31,594.

ICICI Bank January 2018 futures traded at a discount of 1.10 points at 332.90 compared with spot closing of 334.00. The numbers of contracts traded were 23,291.

HDFC Bank January 2018 futures traded at a premium of 2.25 points at 1902.35 compared with spot closing of 1900.10. The numbers of contracts traded were 18,824.

The Federal Bank January 2018 futures traded at a premium of 0.05 points at 104.85 compared with spot closing of 104.80. The numbers of contracts traded were 18,749.

Tata Consultancy Services January 2018 futures traded at a discount of 18.85 points at 2841.15 compared with spot closing of 2860.00. The numbers of contracts traded were 18,597.

Among Nifty calls, 10800 SP from the January month expiry was the most active call with an addition of 0.43 million open interests. Among Nifty puts, 10700 SP from the January month expiry was the most active put with a contraction of 0.40 million open interests.  The maximum OI outstanding for Calls was at 11000 SP (5.22 mn) and that for Puts was at 10500 SP (7.51 mn). The respective Support and Resistance levels of Nifty are: Resistance 10745.92--- Pivot Point 10716.88--- Support --- 10671.42.

The Nifty Put Call Ratio (PCR) finally stood at 1.46 for January month contract. The top five scrips with highest PCR on OI were Infosys (1.32), Jindal Steel & Power (1.31), Wockhardt (1.28), Tech Mahindra (1.25) and Wipro (1.14).

Among most active underlying, Infosys witnessed an addition of 1.28 million units of Open Interest in the January month futures contract, followed by Tata Consultancy Services witnessing  an addition of 0.07 million units of Open Interest in the January month contract, ICICI Bank witnessed a contraction of 1.79 million units of Open Interest in the January month contract, Reliance Industries witnessed a contraction of  0.38 million units of Open Interest in the January month contract and HDFC Bank witnessed  a contraction of 2.02 million units of Open Interest in the January month future contract.