Nifty settles lower; slips below 10,400 mark

Key Indian Equity Benchmark Nifty settled lower on Monday, with losses of around 75 points. The index made a cautious start and remained in red terrain throughout the day, amid FICCI’s survey report stating that glitches in the GSTN portal, cumbersome procedures and documentation as well as the cost of compliance are major areas of concern that need to be addressed to make the Goods and Services Tax (GST) a success. Investors remained concerned, after a joint study by the Confederation of Indian Industry (CII) and the Indian Banks’ Association (IBA) indicated that the India’s financial conditions index stood at 53.2 for Q4 (January-March) of 2017-18 as against 65.3 in the previous quarter, thereby registering a significant fall of 12.1 points. Besides, the market sentiments also got hit with a report highlighting that the ASSOCHAM has demanded the government to reduce its stake in banks to less than 50, in lieu of the ongoing fraudulent transaction scam involving Punjab National Bank. However, the Nifty trimmed some of its losses to come off its intraday low point, taking support with Prime Minister Narendra Modi’s statement that India aspires to, and is moving towards, a $5 trillion economy over the next few years with sustained, comprehensive and holistic development.

All the sectoral indices ended in red on the NSE. The top gainers from the F&O segment were Fortis Healthcare, United Breweries and Apollo Hospitals Enterprise. On the other hand, the top losers were Punjab National Bank, Union Bank of India and NIIT Technologies. In the index option segment, maximum OI continues to be seen in the 10,600-11,100 calls and 10000-10300 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 1.77% and reached 16.66. The 50-share Nifty was down by 73.90 points or 0.71% to settle at 10,378.40.

Nifty February 2018 futures closed at 10378.55 on Monday, at a premium of 0.15 points over spot closing of 10378.40, while Nifty March 2018 futures ended at 10416.30, at a premium of 37.90 points over spot closing. Nifty February futures saw a contraction of 1.32 million (mn) units, taking the total outstanding open interest (OI) to 21.72 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 1.75 points at 116.85 compared with spot closing of 115.10. The numbers of contracts traded were 43,884.

SBI February 2018 futures traded at a discount of 1.35 points at 268.25 compared with spot closing of 269.60. The numbers of contracts traded were 35,591.

Tata Steel February 2018 futures traded at a discount of 0.60 points at 648.40 compared with spot closing of 649.00. The numbers of contracts traded were 31,642.

Infosys February 2018 futures traded at a discount of 2.75 points at 1131.45 compared with spot closing of 1134.20. The numbers of contracts traded were 22,728.

PC Jeweller February 2018 futures traded at a discount of 1.80 points at 354.95 compared with spot closing of 356.75. The numbers of contracts traded were 17,491.

Among Nifty calls, 10500 SP from the February month expiry was the most active call with a contraction of 0.03 million open interests. Among Nifty puts, 10300 SP from the February month expiry was the most active put with an addition of 1.12 million open interests. The maximum OI outstanding for Calls was at 11100 SP (4.91 mn) and that for Puts was at 10000 SP (4.77 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,477.58--- Pivot Point 10,390.17--- Support --- 10,290.98.

The Nifty Put Call Ratio (PCR) finally stood at 0.81 for February month contract. The top five scrips with highest PCR on OI were Cholamandalam Investment and Finance (1.03), V Guard (1.01), Oracle Financial Services Software (1.00), MRF (1.00) and CG Power and Industrial (0.93).

Among most active underlying, State Bank of India witnessed a contraction of 3.60 million units of Open Interest in the February month futures contract, followed by Punjab National Bank witnessing an addition of 1.45 million units of Open Interest in the February month contract, Tata Steel witnessed a contraction of 1.44 million units of Open Interest in the February month contract, Reliance Industries witnessed a contraction of 3.01 million units of Open Interest in the February month contract and ICICI Bank witnessed a contraction of 1.38 million units of Open Interest in the February month future contract.