Nifty ends lower with losses of more than 0.25%

The local equity benchmarks Nifty ended lower on Tuesday, with the losses of more than 0.25%. The index made a positive start, on the back of economic think-tank NCAER’s report stating that the Indian economy is projected to grow at 6.7 per cent in the current financial year and 7.5 per cent in 2018-19. However, the market immediately slipped into red terrain as investors got cautious with the report highlighting that the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) have slumped to nearly eight and a half year low of Rs 1.19 lakh crore at the end of January, amid tough rules put in place by Securities and Exchange Board of India (SEBI) to check their misuse.  Investors’ sentiments also remained dampened, after the government categorised around 9,500 non-banking financial companies -- about 80 per cent of the NBFCs in the country -- as 'high risk' prone as they have not complied with a stipulated provision of the anti-money laundering law. Besides, traders also remained concerned, with a private report stating that inflation is expected to trend higher and though RBI may keep policy rates on hold in 2018-19, there are also increasing chances of a rate hike. Further, the street overlooked Commerce & Industry Minister Suresh Prabhu’s statement that India’s stock market has witnessed a compounded annual growth rate (CAGR) of 13 per cent over the last four years, since Prime Minister Narendra Modi assumed office, which demonstrates that investing in the country makes business sense. 

All the sectoral indices ended in red on the NSE except FMCG and IT. The top gainers from the F&O segment were NCC, Mahanagar Gas and IRB Infrastructure Developers. On the other hand, the top losers were Punjab National Bank, Bank of India and Reliance Naval and Engineering. In the index option segment, maximum OI continues to be seen in the 10,600-11,000 calls and 10000-10400 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 1.66% and reached 13.92. The 50-share Nifty was down by 28.30 points or 0.27% to settle at 10,554.30.

Nifty March 2018 futures closed at 10564.05 on Tuesday, at a premium of 9.75 points over spot closing of 10554.30, while Nifty April 2018 futures ended at 10598.25, at a premium of 43.95 points over spot closing.  Nifty March futures saw an addition of 0.90 million (mn) units, taking the total outstanding open interest (OI) to 21.13 mn units. The near month derivatives contract will expire on March 28, 2018.

From the most active contracts, Punjab National Bank March 2018 futures traded at a premium of 1.20 points at 98.75 compared with spot closing of 97.55. The numbers of contracts traded were 59,663.

State Bank of India March 2018 futures traded at a premium of 0.70 points at 268.40 compared with spot closing of 267.70. The numbers of contracts traded were 20,464.

Maruti Suzuki India March 2018 futures traded at a premium of 39.25 points at 8928.25 compared with spot closing of 8889.00. The numbers of contracts traded were 16,853.

Tata Steel March 2018 futures traded at a discount of 1.15 points at 669.90 compared with spot closing of 671.05. The numbers of contracts traded were 15,695.

Reliance Industries March 2018 futures traded at a premium of 1.65 points at 953.15 compared with spot closing of 951.50. The numbers of contracts traded were 15,048.

Among Nifty calls, 10600 SP from the March month expiry was the most active call with an addition of 0.53 million open interests. Among Nifty puts, 10500 SP from the March month expiry was the most active put with an addition of 0.08 million open interests. The maximum OI outstanding for Calls was at 10600 SP (3.25mn) and that for Puts was at 10400 SP (3.56mn). The respective Support and Resistance levels of Nifty are: Resistance 10,611.55--- Pivot Point 10,574.40--- Support --- 10,517.15.

The Nifty Put Call Ratio (PCR) finally stood at 1.06 for March month contract. The top five scrips with highest PCR on OI were OIL (2.08), Repco Home Finance (2.02), Cummins India (1.65), Dalmia Bharat (1.55) and V Guard (1.45).

Among most active underlying, Punjab National Bank witnessed an addition of 17.26 million units of Open Interest in the March month futures contract, followed by Maruti Suzuki India witnessing a contraction of 0.02 million units of Open Interest in the March month contract, State Bank of India witnessed an addition of 2.20 million units of Open Interest in the March month contract, Reliance Industries witnessed an addition of 0.97 million units of Open Interest in the March month contract and Tata Steel witnessed an addition of 0.42 million units of Open Interest in the March month future contract.