Nifty recovers from day’s low but ends in red

Tracking weak global cues, the local equity benchmark Nifty ended in red on Tuesday, with the losses of more than 150 points. The index traded in red territory throughout the session, because investors remained concerned ahead of the Reserve Bank of India’s (RBI’s) policy review meeting outcome tomorrow amid expectations that the central bank will tighten its monetary policy stance in the wake of growing concerns over fiscal slippage. Sentiments also got hit with the private report stating that GDP growth will slip down to 7 percent in the second half of the next fiscal, though the economy will grow 7.5 percent level in the first half on a lower base. However, the Nifty managed to pare its losses in the last leg of the trade, with traders taking some relief from CBDT chairman Sushil Chandra’s statement that a large number of taxpayers have been brought into the net taking the total base to 8 crore and underlined that the government has consolidated direct tax reforms. Market-men also took some comfort with Finance Minister Arun Jaitley’s statement that expediting public services and ensuring fairness in procurement will supplement rapid economic growth in the South Asian region including India.

All the sectoral indices ended in red on the NSE. The top gainers from the F&O segment were Oil India, Bajaj Finance and PVR. On the other hand, the top losers were PC Jeweller, Jaiprakash Associates and CEAT. In the index option segment, maximum OI continues to be seen in the 10,500-11,600 calls and 10000-11000 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 24.68% and reached 20.01. The 50-share Nifty was down by 168.30 points or 1.58% to settle at 10,498.25.

Nifty February 2018 futures closed at 10513.30 on Tuesday, at a premium of 15.05 points over spot closing of 10498.25, while Nifty March 2018 futures ended at 10530.05, at a premium of 31.80 points over spot closing. Nifty February futures saw a contraction of 0.21 million (mn) units, taking the total outstanding open interest (OI) to 21.68 mn units. The near month derivatives contract will expire on February 22, 2018.

From the most active contracts, Tata Motors February 2018 futures traded at a premium of 0.35 points at 375.60 compared with spot closing of 375.25. The numbers of contracts traded were 29,842.
 
State Bank of India February 2018 futures traded at a discount of 1.05 points at 293.55 compared with spot closing of 294.60. The numbers of contracts traded were 26,042.

HDFC Bank 2018 futures traded at a discount of 0.50 points at 1898.30 compared with spot closing of 1898.80. The numbers of contracts traded were 22,550.

Maruti Suzuki India February 2018 futures traded at a discount of 12.90 points at 9002.10 compared with spot closing of 9015.00. The numbers of contracts traded were 20,907.

Reliance Industries February 2018 futures traded at a premium of 0.95 point at 894.35 compared with spot closing of 893.40. The numbers of contracts traded were 20,713.

Among Nifty calls, 10800 SP from the February month expiry was the most active call with a contraction of 0.22 million open interests. Among Nifty puts, 10000 SP from the February month expiry was the most active put with an addition of 1.08 million open interests.  The maximum OI outstanding for Calls was at 11500 SP (5.77 mn) and that for Puts was at 10000 SP (4.95 mn). The respective Support and Resistance levels of Nifty are: Resistance 10636.17--- Pivot Point 10456.23--- Support --- 10318.32.

The Nifty Put Call Ratio (PCR) finally stood at 0.89 for February month contract. The top five scrips with highest PCR on OI were Godfrey Phillips India (1.43), ICICI Bank (1.15), Oracle Financial Services Software (1.00), Asian Paints (0.98) and Godrej Consumer Products (0.87).

Among most active underlying, Reliance Industries witnessed a contraction of 0.52 million units of Open Interest in the February month futures contract, followed by State Bank of India witnessing a contraction of 5.21 million units of Open Interest in the February month contract, Tata Motors witnessed an addition of 2.11 million units of Open Interest in the February month contract, Maruti Suzuki India  witnessed a contraction of  0.06 million units of Open Interest in the February month contract and HDFC Bank witnessed  a contraction of 0.45 million units of Open Interest in the February month future contract.