Nifty sheds over 1%; settles below 10K mark

The local equity index Nifty settled lower below its crucial psychological level of 10,000 on last trading day of the week, amidst a global sell-off over concerns related to a trade war between the United States and China. The index remained in the grip of bears throughout the session, amid ICRA’s latest report that India’s current account deficit (CAD) is likely to widen to $10-12 billion in the fourth quarter of the fiscal year 2017-18 (FY18), as against $3.4 billion in the same period of the previous fiscal year. It said CAD may increase on the back of higher merchandise trade deficit and added that the services trade surplus is expected to improve. The market participants remained concerned with a report stating that handling the emerging frauds in the banking sector coupled with likely ripple effects, muted GST collections and the protectionist policy imposed by the US are some of the factors that are likely to keep risk to growth elevated. Some concerns also came with another private report which highlighted that India has emerged as one of the Asian economies most vulnerable in an environment of rising interest rates in the US. Traders took note of Commerce Minister Suresh Prabhu’s statement that the world is facing serious challenges as the US is taking protectionist measures and India needs to explore ways to boost exports. Investors paid no heed towards the report that monsoon rains in India are likely to be unaffected by the El Nino weather pattern, which is likely to set in only after the four-month rainy season ends in September. 

All the sectoral indices ended in red on the NSE except IT and Media. The top gainers from the F&O segment were Hindustan Construction, Dish TV and HCL Technologies. On the other hand, the top losers were Fortis Healthcare, Union Bank of India and Syndicate Bank. In the index option segment, maximum OI continues to be seen in the 10,100-10,500 calls and 9,500-9,900 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 1.95% and reached 15.54. The 50-share Nifty was down by 116.70 points or 1.15% to settle at 9,998.05.

Nifty March 2018 futures closed at 10003.90 on Friday, at a premium of 5.85 points over spot closing of 9998.05, while Nifty April 2018 futures ended at 10047.60, at a premium of 49.55 points over spot closing. Nifty March futures saw a contraction of 0.65 million (mn) units, taking the total outstanding open interest (OI) to 22.20 mn units. The near month derivatives contract will expire on March 28, 2018.

From the most active contracts, Tata Steel March 2018 futures traded at a premium of 1.00 points at 568.00 compared with spot closing of 567.00. The numbers of contracts traded were 24,552.

State Bank of India March 2018 futures traded at a discount of 0.10 points at 234.60 compared with spot closing of 234.70. The numbers of contracts traded were 22,718.

Yes Bank March 2018 futures traded at a discount of 0.30 points at 287.10 compared with spot closing of 287.40. The numbers of contracts traded were 18,428.

ICICI Bank March 2018 futures traded at a premium of 2.10 points at 276.40 compared with spot closing of 274.30. The numbers of contracts traded were 17,232.

Vedanta March 2018 futures traded at a premium of 1.30 points at 276.70 compared with spot closing of 275.40. The numbers of contracts traded were 17,008.

Among Nifty calls, 10100 SP from the March month expiry was the most active call with an addition of 1.06 million open interests. Among Nifty puts, 10000 SP from the March month expiry was the most active put with a contraction of 0.69 million open interests. The maximum OI outstanding for Calls was at 10500 SP (5.46mn) and that for Puts was at 9900 SP (3.86mn). The respective Support and Resistance levels of Nifty are: Resistance 10,033.20 ---- Pivot Point 9,992.55 --- Support --- 9957.40.

The Nifty Put Call Ratio (PCR) finally stood at 0.75 for March month contract. The top five scrips with highest PCR on OI were IndusInd Bank (1.20), Titan (1.11), Andhra Bank (1.10), Cummins India (0.99), Ramco Cements (0.91) and Bharat Financial Inclusion (0.90).

Among most active underlying, State Bank of India witnessed a contraction of 4.87 million units of Open Interest in the March month futures contract, followed by Reliance Industries witnessing a contraction of 2.55 million units of Open Interest in the March month contract, Tata Steel witnessed a contraction of 1.82 million units of Open Interest in the March month contract, Maruti Suzuki India witnessed a contraction of 0.07 million units of Open Interest in the March month contract and ICICI Bank witnessed a contraction of 3.98 million units of Open Interest in the March month future contract.