Nifty snaps 9-day winning streak

Snapping nine-day gaining streak, Indian equity benchmarks -- Nifty -- ended lower on Wednesday with losses of around quarter a percent. The index traded in green terrain for most part of the session, aided by International Monetary Fund’s (IMF) statement that India’s GDP growth will accelerate in the current and next fiscal years as structural reforms raise potential output. GDP is forecast to grow 7.4% in the current fiscal from 6.7% in FY18 and accelerate further in FY20 to 7.8%. Besides, the domestic sentiments remained optimistic with Union Minister Suresh Prabhu’s statement that the government is working with the US to resolve all trade issues even as America has decided to review India’s eligibility to enjoy duty-free access for certain products under a tax benefit scheme. Some support also came with a report stating that India recorded the biggest rise of 73% in investment proposals into France among emerging economies in 2017, as there were 19 Indian foreign investment projects in France. However, profit booking in last hour of trade dragged the Nifty lower. Some concerns came with a private report stating that India’s economy will be hit hard by a combination of a global tariff war and the US Federal Reserve’s monetary tightening cycle. The report noted that a tariff war will reduce exports and lead to imported inflation, which will hurt Indian purchasing power and investments. Some anxiety also came with a report highlighting that though the GST implemented by the government in July last year has simplified the tax regime and resolved some long-standing issues such as valuation and tax type for the real estate sector, the consumers might not see a significant reduction in property prices just yet.

Traders were seen piling up positions in FMCG, Reality and Media stocks, while selling was witnessed in PSU Bank, PVT Bank and Fin Services. The top gainers from the F&O segment were Jaiprakash Associates, Godrej Consumer Products and Amara Raja Batteries. On the other hand, the top losers were Balrampur Chini Mills, Jet Airways and PC Jeweller. In the index option segment, maximum OI continues to be seen in the 10,700-11,000 calls and 10,200-10,400 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 0.48% and reached 14.11. The 50-share Nifty was down by 22.50 points or 0.21% to settle at 10,526.20.

Nifty April 2018 futures closed at 10538.85 on Wednesday, at a premium of 12.65 points over spot closing of 10526.20, while Nifty May 2018 futures ended at 10567.10, at a premium of 40.90 points over spot closing. Nifty April futures saw an addition of 0.37 million (mn) units, taking the total outstanding open interest (OI) to 26.48 mn units. The near month derivatives contract will expire on April 26, 2018.

From the most active contracts, ITC April 2018 futures traded at a discount of 0.85 points at 275.65 compared with spot closing of 276.50. The numbers of contracts traded were 19,709.

Infosys April 2018 futures traded at a discount of 2.90 points at 1123.05 compared with spot closing of 1125.95. The numbers of contracts traded were 17,154.

Vedanta April 2018 futures traded flat at 292.10 compared with spot closing of 292.10. The numbers of contracts traded were 14,808.

State Bank of India April 2018 futures traded at a discount of 0.10 points at 246.90 compared with spot closing of 247.00. The numbers of contracts traded were 13,062.

ICICI Bank April 2018 futures traded at a discount of 0.45 points at 289.65 compared with spot closing of 290.10. The numbers of contracts traded were 12,809.

Among Nifty calls, 10600 SP from the April month expiry was the most active call with an addition of 0.33 million open interests. Among Nifty puts, 10500 SP from the April month expiry was the most active put with an addition of 0.78 million open interests.
The maximum OI outstanding for Calls was at 10700 SP (5.05mn) and that for Puts was at 10400 SP (5.14mn). The respective Support and Resistance levels of Nifty are: Resistance 10,577.03 ---- Pivot Point 10,543.37 --- Support --- 10492.53.
The Nifty Put Call Ratio (PCR) finally stood at 1.39 for April month contract. The top five scrips with highest PCR on OI were Hindustan Unilever (1.35), ICICI Bank (1.33), Hindalco (1.28), Bajaj Finance (1.22) and Wipro (1.21).
Among most active underlying, ITC witnessed a contraction of 0.95 million units of Open Interest in the April month futures contract, followed by Infosys witnessing a contraction of 1.02 million units of Open Interest in the April month contract, State Bank of India witnessed an addition of 0.31 million units of Open Interest in the April month contract, ICICI Bank witnessed a contraction of 0.61 million units of Open Interest in the April month contract and Hindalco Industries witnessed an addition of 0.39 million units of Open Interest in the April month future contract.