Nifty ends in red after choppy trade

Indian equity benchmark Nifty ended in red terrain on Wednesday, with the losses of more than quarter a per cent. The index traded choppy throughout the session, as traders took a cautious stance ahead of release of Wholesale Price Index (WPI) data on February 15. Nifty was trading slightly in green in morning deals as traders took some comfort with report that India’s retail inflation cooled down to 5.07% in January 2018, due to easing prices of vegetables, fruits and fuel components. Some solace also came with a report that India’s industrial output registered a growth of 7.1% in the month of December 2017, as compared to 2.4% in December 2016. Some support also came with the report highlighting that National Council of Applied Economic Research’s Business Confidence Index (BCI) registered a substantial increase of 9.1% in October-December of 2017, over July-September quarter, as overall sentiment regarding production, domestic sales, exports, imports of raw materials, and pre-tax profits remained buoyant. However, market witnessed selling pressure in last hour of trade as anxiety spread among investors with Care Ratings’ latest report stating that revenue growth of India Inc nearly halved to 9.3 per cent in the third quarter from 17.7 per cent a year-ago, due to a combination of factors, including the ongoing restocking process and adjustment to GST at the SME level. Similarly, net profit too clipped lower at 24.6 per cent for the three months to December 2017 from 25.3 per cent a year-ago.

All the sectoral indices ended in red on the NSE except Realty. The top gainers from the F&O segment were Reliance Communications, NCC and Dewan Housing Finance. On the other hand, the top losers were Punjab National Bank, Oriental Bank of Commerce and Allahabad Bank.

In the index option segment, maximum OI continues to be seen in the 10,600-11,100 calls and 10,000-10,500 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 3.90% and reached 17.18. The 50-share Nifty was down by 38.85 points or 0.37% to settle at 10,500.90.

Nifty February 2018 futures closed at 10495.20 on Wednesday, at a discount of 5.70 points over spot closing of 10500.90, while Nifty March 2018 futures ended at 10519.85, at a premium of 18.95 points over spot closing. Nifty February futures saw a contraction of 0.16 million (mn) units, taking the total outstanding open interest (OI) to 23.45 mn units. The near month derivatives contract will expire on February 22, 2018.

From the most active contracts, Punjab National Bank February 2018 futures traded at a premium of 1.35 points at 146.20 compared with spot closing of 144.85. The numbers of contracts traded were 29,530.

State Bank of India February 2018 futures traded at a premium of 1.35 points at 276.85 compared with spot closing of 275.50. The numbers of contracts traded were 26,346.

Reliance Industries February 2018 futures traded at a premium of 3.40 points at 932.40 compared with spot closing of 929.00. The numbers of contracts traded were 23,117.

Dewan Housing Finance February 2018 futures traded at a discount of 1.25 points at 551.65 compared with spot closing of 552.90. The numbers of contracts traded were 16,488.

Tata Motors February 2018 futures traded at a premium of 1.60 points at 377.40 compared with spot closing of 375.80. The numbers of contracts traded were 15,220.

Among Nifty calls, 10600 SP from the February month expiry was the most active call with an addition of 0.96 million open interests. Among Nifty puts, 10500 SP from the February month expiry was the most active put with an addition of 0.44 million open interests. The maximum OI outstanding for Calls was at 11100 SP (5.38 mn) and that for Puts was at 10500 SP (5.84 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,575.42--- Pivot Point 10,516.03--- Support --- 10,441.52.

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 Oracle Financial Services Software (1.00), Cipla (0.93), Godfrey Phillips India (0.91), Asian Paints (0.86), Cholamandalam Investment and Finance (0.85).

Among most active underlying, State Bank of India witnessed an addition of 6.19 million units of Open Interest in the February month futures contract, followed by Reliance Industries witnessing a contraction of 0.41 million units of Open Interest in the February month contract, Punjab National Bank witnessed an addition of 10.47 million units of Open Interest in the February month contract, Maruti Suzuki witnessed an addition of 0.01 million units of Open Interest in the February month contract and Tata Motors witnessed an addition of 0.76 million units of Open Interest in the February month future contract.