Nifty ends near day’s low; crashes over 250 points

Crashing over 250 points, key Indian equity benchmark Nifty ended near intraday low point on last trading day of the week. The index made a sluggish start and continued its southward journey throughout the day, on back of some announcements made in the union budget 2018. Finance Minister Arun Jaitley proposed to levy long-term capital gains tax (LTCG) of 10% on gains exceeding Rs 100,000 from sale of equity shares. The traders were also worried about the fiscal slippage issue, largely because of the degree of deviation as well. The government revised fiscal deficit estimates for the current financial year upwards at Rs 5.95 trillion or 3.5% of Gross Domestic Product (GDP) against the earlier estimate of 3.3% and also projected 3.3% for FY19, up from the road-map of 3% of GDP. Sentiments also got hit with the rating agency Fitch Ratings’ statement that high debt burden of the government constrains India's rating upgrade. The markets participants shrugged off Finance Minister Arun Jaitley’s statement that India’s $2.5 trillion economy is now firmly on course to register a strong growth rate of over 8% and indicated that the country has grown on an average of 7.5% in the first three years of the Modi government. Therefore, he expects that the country will grow at 7.2-7.5% in the second half of the current fiscal, ending March 31.

All the sectoral indices ended in red on the NSE except IT. The top gainers from the F&O segment were Tech Mahindra, Max Financial Services and HCL Technologies. On the other hand, the top losers were PC Jeweller, GMR Infrastructure and CEAT. 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 increased by 8.10% and reached 15.25. The 50-share Nifty was down by 256.30 points or 2.33% to settle at 10,760.60.

Nifty February 2018 futures closed at 10755.85 on Friday, at a discount of 4.75 points over spot closing of 10760.60, while Nifty March 2018 futures ended at 10774.10, at a premium of 13.50 points over spot closing. Nifty February futures saw a contraction of 1.01 million (mn) units, taking the total outstanding open interest (OI) to 22.85 mn units. The near month derivatives contract will expire on February 22, 2018.

From the most active contracts, PC Jeweller February 2018 futures traded at a premium of 2.40 points at 364.90 compared with spot closing of 362.50. The numbers of contracts traded were 97,229.

ITC February 2018 futures traded at a premium of 1.00 points at 275.50 compared with spot closing of 274.50. The numbers of contracts traded were 23,526.

Reliance Industries 2018 futures traded at a premium of 5.25 points at 907.15 compared with spot closing of 901.90. The numbers of contracts traded were 22,302.

State Bank of India February 2018 futures traded at a premium of 2.40 points at 298.20 compared with spot closing of 295.80. The numbers of contracts traded were 21,598.

Vedanta February 2018 futures traded at a premium of 1.85 point at 334.35 compared with spot closing of 332.50. The numbers of contracts traded were 21,343.

Among Nifty calls, 11000 SP from the February month expiry was the most active call with an addition of 1.68 million open interests. Among Nifty puts, 10800 SP from the February month expiry was the most active put with an addition of 0.49 million open interests.  The maximum OI outstanding for Calls was at 11500 SP (6.52 mn) and that for Puts was at 10500 SP (5.98 mn). The respective Support and Resistance levels of Nifty are: Resistance 10898.33--- Pivot Point 10817.22--- Support --- 10679.48.

The Nifty Put Call Ratio (PCR) finally stood at 0.82 for February month contract. The top five scrips with highest PCR on OI were ICICI Bank (1.38), Godfrey Phillips India (1.29), Bosch (1.20), Tata Motors (1.10) and Godrej Consumer Products (1.04).

Among most active underlying, PC Jeweller witnessed a contraction of 7.68 million units of Open Interest in the February month futures contract, followed by Reliance Industries witnessing an addition of 0.06 million units of Open Interest in the February month contract, Titan Company witnessed a contraction of 0.38 million units of Open Interest in the February month contract, State Bank of India witnessed a contraction of  2.53 million units of Open Interest in the February month contract and Maruti Suzuki India witnessed  a contraction of 0.002 million units of Open Interest in the February month future contract.