Nifty closes 1% lower amid global selloff

Key Indian benchmark Nifty ended lower on last trading day of the week, as traders kept eye on the turbulence seen across markets worldwide. The index traded on a lackluster note throughout the day as investors’ sentiments were hit with the report that foreign portfolio investors have turned wary on Indian shares again owing to the recent global market sell-off triggered by rising bond yields in developed markets including in the US and the eurozone. FPIs have sold shares worth Rs 3,665.6 crore in the domestic stock market (including provisional data of Wednesday and Thursday) in February after pumping close to Rs 13,000 crore into Indian equities in January. Some concerns also came with the India Ratings’ report that corporate loans worth nearly Rs 2 trillion may turn bad in the next 12-18 months. The market participants also took note of Former Reserve Bank of India (RBI) governor Duvvuri Subbarao’s statement that Finance Minister Arun Jaitley’s decision to relax on fiscal consolidation to give himself more room to spend is a questionable, and by far the most disappointing decision of the budget. He added that the finance minister inherited a fiscal deficit of 4.2% of GDP and he brought it down to 3.5%. But this was at a time when oil price was low and food prices were soft because of good monsoons.

All the sectoral indices ended in red on the NSE except Realty and Metal. The top gainers from the F&O segment were Fortis Healthcare, Steel Authority of India and Reliance Power. On the other hand, the top losers were Glenmark Pharmaceuticals, Manappuram Finance and Sun TV Network.  In the index option segment, maximum OI continues to be seen in the 11,000-11,500 calls and 10000-10500 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 8.20% and reached 19.23. The 50-share Nifty was down by 121.90 points or 1.15% to settle at 10,454.95.

Nifty February 2018 futures closed at 10469.70 on Friday, at a premium of 14.75 points over spot closing of 10454.95, while Nifty March 2018 futures ended at 10489.85, at a premium of 34.90 points over spot closing. Nifty February futures saw an addition of 1.53 million (mn) units, taking the total outstanding open interest (OI) to 22.39 mn units. The near month derivatives contract will expire on February 22, 2018.

From the most active contracts, Reliance Capital February 2018 futures traded at a discount of 1.25 points at 496.25 compared with spot closing of 497.50. The numbers of contracts traded were 23,633.

Tata Steel February 2018 futures traded at a premium of 1.20 points at 685.75 compared with spot closing of 684.55. The numbers of contracts traded were 22,676.

Vedanta 2018 futures traded at a discount of 0.35 points at 316.05 compared with spot closing of 316.40. The numbers of contracts traded were 16,622.

SBI February 2018 futures traded at a premium of 1.55 points at 296.95 compared with spot closing of 295.40. The numbers of contracts traded were 15,449.

Hindustan Petroleum February 2018 futures traded at a premium of 2.00 point at 396.00 compared with spot closing of 394.00. The numbers of contracts traded were 14,766.

Among Nifty calls, 10600 SP from the February month expiry was the most active call with an addition of 0.42 million open interests. Among Nifty puts, 10400 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 11100 SP (5.76 mn) and that for Puts was at 10000 SP (5.76 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,490.70--- Pivot Point 10444.45--- Support --- 10,408.70.

The Nifty Put Call Ratio (PCR) finally stood at 0.87 for February month contract. The top five scrips with highest PCR on OI were Godfrey Phillips India (1.11), CIPLA (1.04), Oracle Financial Services Software (1.00), Asian Paints (0.85), and Godrej Consumer Products (0.84).

Among most active underlying, Steel Authority of India  witnessed an addition of 3.99 million units of Open Interest in the February month futures contract, followed by State Bank of India witnessing an addition of 1.16 million units of Open Interest in the February month contract, Tata steel witnessed a contraction of 0.25 million units of Open Interest in the February month contract, Reliance Industries  witnessed an addition of  0.77 million units of Open Interest in the February month contract and ICICI Bank witnessed  a contraction of 0.59 million units of Open Interest in the February month future contract.