Nifty closes lower for sixth straight session

Continuing its losing streak for the sixth straight session, the local equity benchmark Nifty ended lower on Wednesday, breaching its crucial psychological level of 10,200. After a negative start, the index traded sluggish throughout the session, as fears of a global trade war resurfaced after a key advocate for free trade in the White House resigned. Investors remained cautious with private report stating that private equity and venture capital investments in February registered a sharp 60% month-on-month decline to $1.4 billion across 63 deals, due to the absence of any mega deals. As per the report, no major deals above the value of $300 million happened last month, causing the decline from January, which registered deals worth $3.5 billion. Sentiments also remained downbeat with a private report expecting PSU banks to report treasury loss of Rs 20K crore in Q4. It is of the view that the bond hit will add to Q4 woes, while over ownership will weigh on earnings. Separately, following the new norms on stressed assets issued by the RBI last month, power companies fear that two-thirds of private thermal power capacity is at high risk of being declared as non-performing assets (NPA). Severe impact is expected on 51,000-Mw existing power generation capacity set up with investments of more than Rs 4 lakh crore, and another 28,000-Mw plants are under construction. Traders paid no heed towards report stating that the Indian economy is likely to recover gradually to 7.1 per cent in 2018-19 financial year as GST related disruptions have smoothened and consumption levels have improved. The street also failed to get any sense of relief with the report that employment transition from farm to non-farm sectors in India will be spearheaded by sales domain which has the potential to create 2.5 million jobs in the next three years.

All the sectoral indices ended in red on the NSE except FMCG. The top gainers from the F&O segment were Hexaware Technologies, NIIT Technologies and Dalmia Bharat. On the other hand, the top losers were Fortis Healthcare, Karnataka Bank and Jaiprakash Associates. In the index option segment, maximum OI continues to be seen in the 10,300-10,600 calls and 9,800-10,000 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 3.35% and reached 15.70. The 50-share Nifty was down by 95.05 points or 0.93% to settle at 10,154.20.

Nifty March 2018 futures closed at 10171.55 on Wednesday, at a premium of 17.35 points over spot closing of 10154.20, while Nifty April 2018 futures ended at 10206.35, at a premium of 52.15 points over spot closing. Nifty March futures saw a contraction of 0.50 million (mn) units, taking the total outstanding open interest (OI) to 23.77 mn units. The near month derivatives contract will expire on March 28, 2018.

From the most active contracts, ICICI Bank March 2018 futures traded at a premium of 0.50 points at 288.30 compared with spot closing of 287.80. The numbers of contracts traded were 22,755.

State Bank of India March 2018 futures traded at a premium of 1.25 points at 247.95 compared with spot closing of 246.70. The numbers of contracts traded were 22,000.

Adani Enterprises March 2018 futures traded at a discount of 0.35 points at 173.35 compared with spot closing of 173.70. The numbers of contracts traded were 17,675.

Tata Motors March 2018 futures traded at a premium of 0.60 points at 348.65 compared with spot closing of 348.05. The numbers of contracts traded were 17,461.

Reliance Industries March 2018 futures traded at a premium of 1.75 points at 894.15 compared with spot closing of 892.40. The numbers of contracts traded were 17,015.

Among Nifty calls, 10300 SP from the March month expiry was the most active call with an addition of 0.53 million open interests. Among Nifty puts, 10200 SP from the March month expiry was the most active put with a contraction of 0.32 million open interests. The maximum OI outstanding for Calls was at 10600 SP (5.13mn) and that for Puts was at 10000 SP (4.08mn). The respective Support and Resistance levels of Nifty are: Resistance 10,217.85 ---- Pivot Point 10,179.70 --- Support --- 10116.05.

The Nifty Put Call Ratio (PCR) finally stood at 0.76 for March month contract. The top five scrips with highest PCR on OI were V Guard (2.03), Repco Home Finance (1.58), Cummins India (1.40), OIL (1.33) and Mangalore Refinery & Petrochemicals (0.99).

Among most active underlying, State Bank of India witnessed an addition of 2.80 million units of Open Interest in the March month futures contract, followed by Reliance Industries witnessing an addition of 0.05 million units of Open Interest in the March month contract, ICICI Bank witnessed an addition of 7.10 million units of Open Interest in the March month contract, Maruti Suzuki India witnessed a contraction of 0.05 million units of Open Interest in the March month contract and Tata Steel witnessed a contraction of 0.47 million units of Open Interest in the March month future contract.