Nifty ends lower with over 1% losses

The local equity benchmark -- Nifty -- ended lower on Wednesday, plunging more than a per cent, amid renewed fears of a global trade war after China retaliated against US tariffs by imposing additional duties on $50 billion of US goods. After a cautious start, the index managed to trade above neutral line for first half of the session, supported by positive Monsoon 2018 forecast. The private weather forecasting agency report stated that monsoon rains in India are expected to be average in 2018, raising prospects of higher farm and economic growth in the $2 trillion economy. The report added that monsoon rains are expected to be 100 percent of the long-term average. Investors also took some support with Finance Minister Arun Jaitley’s statement that the GST implementation and impact of demonetisation have resulted into higher formalisation of the Indian economy. He added that direct tax collections hit the landmark figure of Rs 10.02 lakh crore in 2017-18, 18 per cent higher than previous fiscal, the number of income tax returns filed rose to 6.84 crore during 2017-18, compared to 5.43 crore filed in 2016-17. This represents a 26 per cent rise in ITRs. However, in second half of the session, the Nifty entered into negative terrain and ended the day near intraday low point, as anxiety spread among the traders ahead of the Reserve Bank of India’s monetary policy review that begins today. Sentiments were also dampened with the Andhra Pradesh government’s statement that the Centre 'grossly failed' in effectively implementing the Goods and Services Tax (GST) and accused it of 'sidetracking' the new taxation system.

All the sectoral indices ended in red on the NSE except Auto. The top gainers from the F&O segment were Reliance Power, Reliance Naval and Engineering and Repco Home Finance. On the other hand, the top losers were Adani Enterprises, Hexaware Technologies and PC Jeweller. In the index option segment, maximum OI continues to be seen in the 10,300-10,500 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 increased by 7.60% and reached 16.34. The 50-share Nifty was down by 116.60 points or 1.14% to settle at 10,128.40.

Nifty April 2018 futures closed at 10146.60 on Wednesday, at a premium of 18.20 points over spot closing of 10128.40, while Nifty May 2018 futures ended at 10175.50, at a premium of 47.10 points over spot closing. Nifty April futures saw an addition of 2.49 million (mn) units, taking the total outstanding open interest (OI) to 22.04 mn units. The near month derivatives contract will expire on April 26, 2018.

From the most active contracts, Tata Motors April 2018 futures traded at a premium of 1.30 points at 356.10 compared with spot closing of 354.80. The numbers of contracts traded were 41,074.

ICICI Bank April 2018 futures traded at a premium of 0.90 points at 269.00 compared with spot closing of 268.10. The numbers of contracts traded were 27,467.

Tata Steel April 2018 futures traded at a premium of 3.65 points at 562.75 compared with spot closing of 559.10. The numbers of contracts traded were 25,363.

Adani Enterprises April 2018 futures traded at a premium of 3.75 points at 153.30 compared with spot closing of 149.55. The numbers of contracts traded were 19,625.

Vedanta April 2018 futures traded at a premium of 2.50 points at 274.40 compared with spot closing of 271.90. The numbers of contracts traded were 19,123.

Among Nifty calls, 10300 SP from the March month expiry was the most active call with an addition of 0.93 million open interests. Among Nifty puts, 10000 SP from the March month expiry was the most active put with an addition of 0.01 million open interests.The maximum OI outstanding for Calls was at 10500 SP (3.88mn) and that for Puts was at 10000 SP (4.42mn). The respective Support and Resistance levels of Nifty are: Resistance 10,235.07 ---- Pivot Point 10,173.18 --- Support --- 10066.52.

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 India (1.50), Cummins India (1.47), Bajaj Finance (1.01), ICICI Bank (1.01) and Hero MotoCorp (1.01).

Among most active underlying, Adani Enterprises witnessed a contraction of 2.33 million units of Open Interest in the April month futures contract, followed by Tata Motors witnessing an addition of 1.41 million units of Open Interest in the April month contract, ICICI Bank witnessed an addition of 0.23 million units of Open Interest in the April month contract, Tata Steel witnessed an addition of 1.27 million units of Open Interest in the April month contract and Maruti Suzuki witnessed an addition of 0.03 million units of Open Interest in the April month future contract.