Nifty ends lower; snaps three day gaining streak

Indian equity benchmark Nifty ended lower on Wednesday, snapping its three-day gaining streak amid weak cues from other Asian markets. After a positive start, the index kept altering between green and red throughout the session, as anxiety spread on the street after the growth of eight core infrastructure industries slowed to three-month low of 4.1% in March 2018, as compared to 5.3% in February 2018, on account of weak performance in as many as six sectors including coal, crude oil and natural gas. According to data released by the ministry of Commerce and Industry, the combined Index of eight core industries stood at 138.0 in March, 2018, which was 4.1% higher compared to the index of March, 2017. Besides, the market participants got worried with Moody’s Investors Service latest report stating that the Reserve Bank of India's (RBI) push to banks to recognize problem assets more accurately will reduce profitability of banks in the near term. It said that increased provisioning will hurt the banks' profitability, and weaker public sector banks (PSBs) in particular will continue to report losses in the next fiscal year (FY19), adding pressure on their capital ratios. However, in the last leg of the trade, the nifty trimmed losses to come off its intraday low point, as some relief came with a report highlighting that the seasonally adjusted Nikkei India Manufacturing Purchasing Managers Index (PMI) surged to 51.6 in April from 51.0 in March. Some comfort also came with a report stating that the government’s revenue collection under the Goods and Services Tax (GST) during the month of April 2018 has crossed the Rs 1 lakh crore mark for the first time since the launch of new tax regime on July 1 last year. According to the latest data released by the government, the total revenue mop-up under GST stood at Rs 1,03,458 crore in April 2018.

Traders were seen piling up positions in Financial Service, PVT Bank and FMCG stocks, while selling was witnessed in Metal, PSU Bank and Realty. The top gainers from the F&O segment were Equitas Holdings, Reliance Communications and Kotak Mahindra Bank. On the other hand, the top losers were PC Jeweller, Repco Home Finance and Century Textiles & Industries. In the index option segment, maximum OI continues to be seen in the 10,800-11,000 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 3.86% and reached 12.84. The 50-share Nifty was down by 21.30 points or 0.20% to settle at 10,718.05.

Nifty May 2018 futures closed at 10739.40 on Wednesday, at a premium of 21.35 points over spot closing of 10718.05, while Nifty June 2018 futures ended at 10746.90, at a premium of 28.85 points over spot closing.  Nifty May futures saw a contraction of 0.07 million (mn) units, taking the total outstanding open interest (OI) to 23.72 mn units. The near month derivatives contract will expire on May 31, 2018.

From the most active contracts, PC Jeweller May 2018 futures traded at a discount of 0.25 points at 110.80 compared with spot closing of 111.05. The numbers of contracts traded were 31,716.

Kotak Mahindra Bank May 2018 futures traded at a discount of 0.95 points at 1259.05 compared with spot closing of 1260.00. The numbers of contracts traded were 28,098.

Tata Motors May 2018 futures traded at a premium of 1.60 points at 337.35 compared with spot closing of 335.75. The numbers of contracts traded were 23,118.

Century Textiles & Industries May 2018 futures traded at a premium of 1.30 points at 1146.30 compared with spot closing of 1145.00. The numbers of contracts traded were 20,230.

Dewan Housing Finance Corporation May 2018 futures traded at a premium of 5.85 points at 652.85 compared with spot closing of 647.00. The numbers of contracts traded were 19,471.

Among Nifty calls, 10800 SP from the May month expiry was the most active call with an addition of 0.26 million open interests. Among Nifty puts, 10700 SP from the May month expiry was the most active put with an addition of 0.33 million open interests. The maximum OI outstanding for Calls was at 11000 SP (6.09mn) and that for Puts was at 10500 SP (4.56mn). The respective Support and Resistance levels of Nifty are: Resistance 10,771.87 ---- Pivot Point 10,730.83 --- Support --- 10677.02.

The Nifty Put Call Ratio (PCR) finally stood at 1.21 for May month contract. The top five scrips with highest PCR on OI were Dish TV (1.78), Godrej Consumer Products (1.38), AXIS Bank (1.31), Infibeam Incorporation (1.05) and Mangalore Refinery & Petrochemicals (0.97).

Among most active underlying, Kotak Mahindra Bank witnessed an addition of 1.33 million units of Open Interest in the May month futures contract, followed by Reliance Industries witnessing a contraction of 0.52 million units of Open Interest in the May month contract, Maruti Suzuki witnessed a contraction of 0.02 million units of Open Interest in the May month contract, Dewan Housing Finance Corporation witnessed an addition of 1.23 million units of Open Interest in the May month contract and HDFC Bank witnessed an addition of 0.63 million units of Open Interest in the May month future contract.