Nifty closes lower for second straight session; settles below 10,500 mark

India equity benchmark Nifty ended lower for second straight session on Wednesday, settling below crucial psychological level of 10,500 mark. After opening in red territory, the index continued its sluggish trade throughout the session, amid report that the government’s revenue collection under the Goods and Services Tax (GST) has registered a marginal fall in the month of January 2018 (received up to February 25, 2018). According to the latest data released by the government, the total revenue mop-up under GST slipped by 0.44% to Rs 86,318 crore in January 2018 as compared to Rs 86,703 crore in December 2017. Sentiments also got hit, after India’s manufacturing sector activity signaled a slightly slower growth in February month, falling to 4-month low. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - slowed down to 52.1 in February from 52.4 in January. Adding some anxiety among the investors, the fiscal deficit for the April-January period stood at Rs 6.77 lakh crore. That is 113.7% of FY18 target, which means Modi government may not do any extra spending in the remaining two months of the year. Traders also took note of Power Secretary A K Bhalla’s statement that India is a power surplus country but electricity does not reach all regions due to network constraints in some states. The street overlooked Finance Minister Arun Jaitley’s  statement that India has the potential to beat a growth rate of 7-8 percent and it will continue to remain one of the fastest growing economies in the world.

All the sectoral indices ended in red on the NSE except PUC Bank and IT. The top gainers from the F&O segment were Indian Bank, V-Guard and Oriental Bank of Commerce. On the other hand, the top losers were Jindal Steel & Power, Jaiprakash Associates and Dewan Housing Finance. In the index option segment, maximum OI continues to be seen in the 10,700-11,000 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 decreased by 0.84% and reached 13.80. The 50-share Nifty was down by 61.45 points or 0.58% to settle at 10,492.85.

Nifty March 2018 futures closed at 10519.40 on Wednesday, at a premium of 26.55 points over spot closing of 10492.85, while Nifty April 2018 futures ended at 10560.35, at a premium of 67.50 points over spot closing.  Nifty March futures saw an addition of 0.16 million (mn) units, taking the total outstanding open interest (OI) to 21.29 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 0.25 points at 101.65 compared with spot closing of 101.40. The numbers of contracts traded were 61,049.

Reliance Industries March 2018 futures traded at a premium of 4.60 points at 955.60 compared with spot closing of 951.00. The numbers of contracts traded were 24,461.

State Bank of India March 2018 futures traded at a premium of 1.40 points at 269.35 compared with spot closing of 267.95. The numbers of contracts traded were 20,497.

Infosys March 2018 futures traded at a premium of 4.45 points at 1174.30 compared with spot closing of 1169.85. The numbers of contracts traded were 15,910.

Canara Bank March 2018 futures traded at a premium of 1.75 points at 300.15 compared with spot closing of 298.40. The numbers of contracts traded were 14,685.

Among Nifty calls, 10600 SP from the March month expiry was the most active call with a contraction of 0.24 million open interests. Among Nifty puts, 10400 SP from the March month expiry was the most active put with an addition of 0.15 million open interests. The maximum OI outstanding for Calls was at 10700 SP (3.68mn) and that for Puts was at 10400 SP (3.72mn). The respective Support and Resistance levels of Nifty are: Resistance 10,531.72--- Pivot Point 10,496.63--- Support --- 10,457.77.

The Nifty Put Call Ratio (PCR) finally stood at 1.01 for March month contract. The top five scrips with highest PCR on OI were OIL (2.13), Repco Home Finance (1.96), Colgate Palmolive (1.61), Cummins India (1.50) and Indiabulls Housing Finance (1.36).

Among most active underlying, Punjab National Bank witnessed an addition of 0.87 million units of Open Interest in the March month futures contract, followed by Reliance Industries witnessing an addition of 6.07 million units of Open Interest in the March month contract, State Bank of India witnessed an addition of 3.41 million units of Open Interest in the March month contract, Maruti Suzuki India witnessed an addition of 2.32 million units of Open Interest in the March month contract and ICICI Bank witnessed an addition of 1.03 million units of Open Interest in the March month future contract.