Nifty ends lower; settles below 10,500 mark

The local equity benchmark Nifty ended lower with losses of 0.88% on last trading day of the week. The index made a positive opening, as traders took some support with report stating that growth in non-food credit in the fortnight to February 2, 2018, rose to near three-year high of 11.89 per cent year-on-year (y-o-y). According to data compiled by the Reserve Bank of India (RBI), the outstanding loans from banks to industry and individuals stood at Rs 82.11 lakh crore as on February 2. Credit growth has moved into double-digit territory in recent months.  Investors took note of International Monetary Fund (IMF) director of Communications Department Gerry Rice’s statement that the budget for 2018-19 assumes the tax revenue to increase faster than the value of transactions in the economy. He added that the budget aims for a deficit that is smaller than the deficit that was expected in 2017-18. However, the index failed to hold the gains and slipped into red terrain amid report that that the overall trade deficit widened to $16298.47 million during the month under review as against $9904.82 million in January 2017, the highest in more than three years. Sentiments remained downbeat, as the World Bank identified two global risks that could jeopardise the country’s progress towards a ‘global middle-class status’. These two risks are anti-international trade sentiment and climate change. Meanwhile, Road Transport and Highways Minister Nitin Gadkari stated that the government would not bring any separate electric vehicle policy and would just frame rules for the category.

All the sectoral indices ended in red on the NSE. The top gainers from the F&O segment were PC Jeweller, V-Guard Industries and Jaiprakash Associates. On the other hand, the top losers were Sun TV Network, Apollo Hospitals Enterprise and Jindal Steel & Power. In the index option segment, maximum OI continues to be seen in the 10,600-11,000 calls and 10,000-10,400 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 0.38% and reached 16.37. The 50-share Nifty was down by 93.20 points or 0.88% to settle at 10,452.30.

Nifty February 2018 futures closed at 10453.35 on Friday, at a premium of 1.05 points over spot closing of 10452.30, while Nifty March 2018 futures ended at 10483.35, at a premium of 31.05 points over spot closing. Nifty February futures saw an addition of 0.01 million (mn) units, taking the total outstanding open interest (OI) to 23.04 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 discount of -0.05 points at 126.05 compared with spot closing of 126.10. The numbers of contracts traded were 57,958.

Fortis Healthcare February 2018 futures traded at a premium of 0.35 points at 138.05 compared with spot closing of 137.70. The numbers of contracts traded were 28,520.

State Bank of India February 2018 futures traded at a premium of 1.10 points at 272.50 compared with spot closing of 271.40. The numbers of contracts traded were 23,507.

Yes Bank February 2018 futures traded at a premium of 0.50 points at 312.50 compared with spot closing of 312.00. The numbers of contracts traded were 17,374.

Sun Pharmaceutical February 2018 futures traded at a discount of 0.05 points at 574.95 compared with spot closing of 575.00. The numbers of contracts traded were 16,140.

Among Nifty calls, 10600 SP from the February month expiry was the most active call with an addition of 1.68 million open interests. Among Nifty puts, 10500 SP from the February month expiry was the most active put with a contraction of 0.85 million open interests. The maximum OI outstanding for Calls was at 10600 SP (5.24 mn) and that for Puts was at 10000 SP (4.63 mn). The respective Support and Resistance levels of Nifty are: Resistance 10565.45 --- Pivot Point 10499.75 --- Support --- 10386.60.

The Nifty Put Call Ratio (PCR) finally stood at 0.84 for February month contract. The top five scrips with highest PCR on OI were Cholamandalam Investment and Finance (1.04), Oracle Financial Services Software (1.00), Godrej Consumer Products (0.84), Tata Motors (0.83) and Asian Paints (0.83).

Among most active underlying, Punjab National Bank witnessed a contraction of 4.46 million units of Open Interest in the February month futures contract, followed by State Bank of India witnessing an addition of 0.02 million units of Open Interest in the February month contract, Maruti Suzuki India witnessed an contraction of 0.13 million units of Open Interest in the February month contract and Reliance Industries witnessed an contraction of 2.07 million units of Open Interest in the February month.