Nifty ends lower amid weak global markets

The local equity benchmark Nifty ended lower on Thursday amid weak global markets. Traders remained anxious over the disappointing fiscal deficit data, which stood at Rs 6.77 lakh crore during April-January  2017-18 period; 113.7% of Rs 5.95 lakh crore revised Budget Estimates (BE) target for FY18. Sentiments also got hit, after Former RBI governor D Subbarao cautioned against India’s deficit challenge and said the country is no longer the sweet spot due to rising oil prices. He also said raising of import tariff in the Union Budget 2018-19 will hurt Make in India mission. After a negative start, the market recovered in the afternoon deals but failed to hold gains despite better-than-expected GDP growth data. According to the Central Statistics Office data, Indian economy grew at five-quarter high of 7.2% in the October-December period of the fiscal year 2017-18 (FY18), as against 6.5% in the previous quarter and 6.8% in the same period last year, on the back of a sharp pickup in the services sector, a rebound in industrial activity, especially manufacturing and construction, and an expansion in agriculture. The market participants overlooked the report highlighting that  India’s core sector output expanded at a faster pace of 6.7% in January 2018, against the 4.2% growth recorded in December 2017, as petroleum refinery and cement output zoomed while steel power and coal production improved. 

All the sectoral indices ended in red on the NSE. The top gainers from the F&O segment were IDBI Bank, Dalmia Bharat and NIIT Technologies. On the other hand, the top losers were Indian Bank, Housing Development and Infrastructure and Reliance Capital. In the index option segment, maximum OI continues to be seen in the 10,500-10,800 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 1.94% and reached 14.07. The 50-share Nifty was down by 34.50 points or 0.33% to settle at 10,458.35.

Nifty March 2018 futures closed at 10456.55 on Thursday, at a discount of 1.80 points over spot closing of 10458.35, while Nifty April 2018 futures ended at 10492.15, at a premium of 33.80 points over spot closing.  Nifty March futures saw an addition of 1.11 million (mn) units, taking the total outstanding open interest (OI) to 22.40 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 0.45 points at 101.25 compared with spot closing of 100.80. The numbers of contracts traded were 39,965.

State Bank of India March 2018 futures traded at a premium of 1.25 points at 263.45 compared with spot closing of 262.20. The numbers of contracts traded were 18,905.

ICICI Bank March 2018 futures traded at a premium of 1.35 points at 305.75 compared with spot closing of 304.40. The numbers of contracts traded were 18,417.

IDBI Bank March 2018 futures traded at a premium of 0.25 points at 80.75 compared with spot closing of 80.50. The numbers of contracts traded were 15,166.

Tata Steel March 2018 futures remain unchanged at 673.50 compared with spot closing of 673.50. The numbers of contracts traded were 14,781.

Among Nifty calls, 10600 SP from the March month expiry was the most active call with an addition of 0.25 million open interests. Among Nifty puts, 10500 SP from the March month expiry was the most active put with an addition of 0.21 million open interests. The maximum OI outstanding for Calls was at 10800 SP (4.42mn) and that for Puts was at 10400 SP (3.67mn). The respective Support and Resistance levels of Nifty are: Resistance 10,506.85 ---- Pivot Point 10,477.00 --- Support --- 10428.50.

The Nifty Put Call Ratio (PCR) finally stood at 0.92 for March month contract. The top five scrips with highest PCR on OI were Repco Home Finance (2.00), OIL (1.87), Colgate Palmolive (1.82), Container Corporation of India (1.50) and Cummins India (1.50).

Among most active underlying, Punjab National Bank witnessed a contraction of 2.74 million units of Open Interest in the March month futures contract, followed by ICICI Bank witnessing an addition of 4.75 million units of Open Interest in the March month contract, State Bank of India witnessed an addition of 1.05 million units of Open Interest in the March month contract, IDBI Bank witnessed an addition of 15.33 million units of Open Interest in the March month contract and Maruti Suzuki India witnessed an addition of 0.04 million units of Open Interest in the March month future contract.