Nifty ends flat with negative bias

Key Indian equity benchmark Nifty ended flat with a negative bias on last trading day of the week, mirroring weak Asian markets. The index traded lackluster throughout the day, as the domestic sentiments got hit with International Monetary Fund’s (IMF) Chief Christine Lagarde’s statement that India is unlikely to carry on same speed of major economic reforms in an election year. Traders remained worried as the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) flagged several concerns, including an increase in minimum support prices for farmers, house rent allowance (HRA) revision and high and volatile crude oil prices, indicating a tightening of the policy regime in the coming months. Investors took note of former finance minister Yashwant Sinha’s statement that the cash crunch at ATMs in some parts of the country is a case of complete mismanagement on the part of both the RBI and the government. He said the magnitude of the crisis is huge and the Reserve Bank did not have a backup plan to deal with such a situation. Separately, All India Bank Employees Association (AIBEA), representing the banking industry said that concrete action is required by the Reserve Bank to address the cash crunch and warned of a protest on the issue. However, in the last leg of the trade, the Nifty managed to trim most of the losses and ended flat, as some relief came with a private report stating that India has been recording the highest growth rate amongst the Brazil, Russia, India, China and South Africa (BRICS) economies. The report further highlighted that in spite of some reformative steps that slowed the growth momentum in the first quarter of FY18, the economy is likely to grow at 7.4 per cent in 2018 -- higher than the advanced economies and the world -- which are at 2 per cent and 3 per cent respectively.  Besides, investors also got some comfort with a report that PE investments witnessed a robust 46 per cent jump in deal values at $1.3 billion in March, taking the total tally for the first quarter of 2018 to $4 billion, up 76 per cent over the same period a year ago.

All the sectoral indices ended in red on the NSE except Auto and IT. The top gainers from the F&O segment were MindTree, Tata Consultancy Services and Max Financial Services. On the other hand, the top losers were Bank of India, Canara Bank and Andhra Bank. In the index option segment, maximum OI continues to be seen in the 10,700-11,000 calls and 10,300-10,500 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 5.89% and reached 12.94. The 50-share Nifty was down by 1.25 points or 0.01% to settle at 10,564.05.

Nifty April 2018 futures closed at 10585.50 on Friday, at a premium of 21.45 points over spot closing of 10564.05, while Nifty May 2018 futures ended at 10613.35, at a premium of 49.30 points over spot closing.  Nifty April futures saw a contraction of 0.13 million (mn) units, taking the total outstanding open interest (OI) to 26.39 mn units. The near month derivatives contract will expire on April 26, 2018.

From the most active contracts, Tata Consultancy Services April 2018 futures traded at a discount of 12.55 points at 3401.45 compared with spot closing of 3414.00. The numbers of contracts traded were 63,134.

Infosys April 2018 futures traded at a discount of 6.45 points at 1173.20 compared with spot closing of 1179.65. The numbers of contracts traded were 32,448.

MindTree April 2018 futures traded at a discount of 21.90 points at 966.05 compared with spot closing of 987.95. The numbers of contracts traded were 21,346.

Yes Bank April 2018 futures traded at a premium of 0.70 points at 309.70 compared with spot closing of 309.00. The numbers of contracts traded were 20,507.

Hindalco April 2018 futures traded at a discount of 1.00 points at 262.05 compared with spot closing of 263.05. The numbers of contracts traded were 20,411.

Among Nifty calls, 10600 SP from the April month expiry was the most active call with a contraction of 0.28 million open interests. Among Nifty puts, 10500 SP from the April month expiry was the most active put with an addition of 0.05 million open interests. The maximum OI outstanding for Calls was at 10700 SP (5.00mn) and that for Puts was at 10500 SP (5.49mn). The respective Support and Resistance levels of Nifty are: Resistance 10,588.45 ---- Pivot Point 10,557.95 --- Support --- 10533.55.

The Nifty Put Call Ratio (PCR) finally stood at 1.43 for April month contract. The top five scrips with highest PCR on OI were Hindalco (1.73), TCS (1.38), Hindustan Unilever (1.32), Vedanta (1.24) and Tech Mahindra (1.21).

Among most active underlying, Tata Consultancy Services witnessed a contraction of 0.23 million units of Open Interest in the April month futures contract, followed by Infosys witnessing a contraction of 0.66 million units of Open Interest in the April month contract, MindTree witnessed an addition of 0.38 million units of Open Interest in the April month contract, Hindalco Industries witnessed a contraction of 3.60 million units of Open Interest in the April month contract and HDFC Bank witnessed an addition of 0.03 million units of Open Interest in the April month future contract.