Nifty ends lower with notable losses

The local equity benchmark Nifty ended lower on Wednesday below its crucial psychological level of 10,600 as anxiety spread among the investors ahead of April month F&O expiry. The index traded in red throughout the day, on the back of weak global cues. The domestic sentiments remained downbeat with a report that India is likely to face greater pressure to eliminate duties on 90% of goods it trades with China under the mega trade agreement among 16 Asia Pacific countries that is in the works. Market pared losses in the second half of the trade as traders took some solace with a private report stating that Indian economy is expected to witness a cyclical recovery driven by investments as well as consumption, and the average GDP growth is expected to rise to 7.8% in the first half of this year. Investors also got some comfort with Union Commerce and Industry Minister Suresh Prabhu’s statement that a new industrial policy has been finalized by the government and its major focus will be on encouraging setting up of industries in rural areas. But, Nifty witnessed selling pressure in last leg of trade which dragged the market even lower as market-men turned cautious after National Stock Exchange’s (NSE) data report that an auction of investment limits for debt securities received bids worth Rs 20,712 crore against Rs 26,002 crore bonds put on offer, signalling a weak demand for government bonds among FPIs. Investors took note of a private report that the private equity (PE) investments into the country’s real estate sector declined by 19% year on year in financial year 2017-18.

All the sectoral indices ended in red on the NSE except IT and Realty. The top gainers from the F&O segment were NIIT Technologies, Raymond and ICICI Prudential Life Insurance. On the other hand, the top losers were PC Jeweller, Godfrey Phillips India and Petronet LNG. 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 increased by 4.20% and reached 12.39. The 50-share Nifty was down by 43.80 points or 0.41% to settle at 10,570.55.

Nifty April 2018 futures closed at 10569.05 on Wednesday, at a discount of 1.50 points over spot closing of 10570.55, while Nifty May 2018 futures ended at 10591.70, at a premium of 21.15 points over spot closing.  Nifty April futures saw a contraction of 4.51 million (mn) units, taking the total outstanding open interest (OI) to 16.67 mn units. The near month derivatives contract will expire on April 26, 2018.

From the most active contracts, Reliance Industries April 2018 futures traded at a discount of 1.10 points at 970.90 compared with spot closing of 972.00. The numbers of contracts traded were 29,917.

Bharti Airtel April 2018 futures traded at a premium of 0.80 points at 418.85 compared with spot closing of 418.05. The numbers of contracts traded were 29,407.

Tata Consultancy Services April 2018 futures traded at a premium of 3.20 points at 3469.20 compared with spot closing of 3466.00. The numbers of contracts traded were 28,895.

Yes Bank April 2018 futures traded at flat at 325.15 compared with spot closing of 325.15. The numbers of contracts traded were 27,246.

Infosys April 2018 futures traded at a premium of 2.95 points at 1158.90 compared with spot closing of 1155.95. The numbers of contracts traded were 23,542.

Among Nifty calls, 10600 SP from the April month expiry was the most active call with an addition of 0.80 million open interests. Among Nifty puts, 10500 SP from the April month expiry was the most active put with a contraction of 0.46 million open interests. The maximum OI outstanding for Calls was at 10700 SP (4.04mn) and that for Puts was at 10500 SP (4.49mn). The respective Support and Resistance levels of Nifty are: Resistance 10,609.95 ---- Pivot Point 10,573.20 --- Support --- 10533.80.

The Nifty Put Call Ratio (PCR) finally stood at 1.56 for April month contract. The top five scrips with highest PCR on OI were Bharti Airtel (1.41), Hindustan Unilever (1.16), Ashok Leyland (1.16), Indusind Bank (1.09) and Kotak Mahindra Bank (1.05).

Among most active underlying, Tata Consultancy Services witnessed a contraction of 1.27 million units of Open Interest in the April month futures contract, followed by Reliance Industries witnessing a contraction of 15.09 million units of Open Interest in the April month contract, Bharti Airtel witnessed a contraction of 14.09 million units of Open Interest in the April month contract, Infosys witnessed a contraction of 6.88 million units of Open Interest in the April month contract and DLF witnessed a contraction of 7.63 million units of Open Interest in the April month future contract.