Nifty ends lower; settles below 11,050 mark

Mirroring weak cues from global markets, the local equity benchmark Nifty ended lower on Tuesday, with the losses of around three-fourth of a percent. The index traded lackluster throughout the session, as caution prevailed ahead of the upcoming Union Budget 2018-19, which is to be announced on February 1, 2018. Sentiments remained downbeat with NITI Aayog Vice Chairman Rajiv Kumar’s statement that the government may settle for slightly higher fiscal deficit in 2018-19 as well. The government aims to restrain the fiscal deficit for 2017-18 to 3.2 percent of the GDP and 3 percent in 2018-19. Besides, profit-booking in recent outperformers, also dragged index below the neutral line. Investors took note of Chief Economic Adviser Arvind Subramanian’s statement that elevated stock prices are a matter of concern and could correct sharply if they are not backed by growth, requiring ‘heightened vigilance’. The market participants failed to take any sense of relief with the Chairman of the Economic Advisory Council Dr Bibek Debroy’s statement that the Economic Survey reflects the government’s commitment to both growth and development. He further noted that the emphasis on women’s empowerment is a welcome step.

All the sectoral indices ended in red on the NSE. The top gainers from the F&O segment were Reliance Communications, Balkrishna Industries and KPIT Technologies. On the other hand, the top losers were Wockhardt, Just Dial and PC Jeweller. In the index option segment, maximum OI continues to be seen in the 11000-12000 calls and 10500-11000 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 8.23% and reached 16.41. The 50-share Nifty was down by 80.75 points or 0.73% to settle at 11,049.65.

Nifty February 2018 futures closed at 11072.10 on Tuesday, at a premium of 22.45 points over spot closing of 11049.65, while Nifty March 2018 futures ended at 11096.45, at a premium of 46.80 points over spot closing. Nifty February futures saw an addition of 0.18 million (mn) units, taking the total outstanding open interest (OI) to 25.77 mn units. The near month derivatives contract will expire on February 22, 2018.

From the most active contracts, Indian Oil Corporation February 2018 futures traded at a discount of 18.40 points at 397.60 compared with spot closing of 416.00. The numbers of contracts traded were 31,916.

State Bank of India February 2018 futures traded at a premium of 0.55 points at 314.05 compared with spot closing of 313.50. The numbers of contracts traded were 18,460.

ICICI Bank 2018 futures traded at a premium of 1.50 points at 354.80 compared with spot closing of 353.30. The numbers of contracts traded were 12,657.

Vedanta February 2018 futures traded at a premium of 0.10 points at 341.90 compared with spot closing of 341.80. The numbers of contracts traded were 12,553.

Tata Steel Industries February 2018 futures traded at a discount of 10.15 point at 770.85 compared with spot closing of 781.00. The numbers of contracts traded were 11,827.

Among Nifty calls, 11500 SP from the February month expiry was the most active call with an addition of 0.49 million open interests. Among Nifty puts, 11000 SP from the February month expiry was the most active put with an addition of 0.36 million open interests.  The maximum OI outstanding for Calls was at 12000 SP (3.50 mn) and that for Puts was at 10500 SP (5.40 mn). The respective Support and Resistance levels of Nifty are: Resistance 11102.53--- Pivot Point 11068.22--- Support --- 11015.33.

The Nifty Put Call Ratio (PCR) finally stood at 1.07 for February month contract. The top five scrips with highest PCR on OI were the Ramco Cements (6.20), V-Guard Industries (2.55), Berger Paints (2.54), ICICI Bank (1.86) and Bosch (1.50).

Among most active underlying, Indian Oil Corporation witnessed an addition of 5.42 million units of Open Interest in the February month futures contract, followed by State Bank of India witnessing a contraction of 0.74 million units of Open Interest in the February month contract, ICICI Bank witnessed a contraction of 0.53 million units of Open Interest in the February month contract, Reliance Industries witnessed an addition of  1.06 million units of Open Interest in the February month contract and Maruti Suzuki India witnessed  a contraction of 0.04 million units of Open Interest in the February month future contract.