Nifty ends lower below 10,750 mark

The local equity benchmark Nifty ended lower on Wednesday, with a cut of more than half a percent. The index remained under pressure throughout the session, as the domestic sentiments got hit after trade deficit widened slightly to $13.72 billion in April from $13.25 billion a year ago.  Besides, overall trade deficit, taking merchandise and services together, for April-March 2017-18 is estimated at $80.61 billion as compared to $41.79 billion during April-March 2016-17. Sentiments were also downbeat with a private report showing that inflation is set to rise further towards the second half of the fiscal, and could average 5.1% this financial year compared to 3.6% last year. The factors that are likely to impact inflation going forward include higher oil prices, a weaker rupee, higher MSPs and more currency in circulation. However, the Nifty managed to trim losses in second half of the session, amid media reports that Yeddyurappa was elected as BJP legislature party head and Karnataka governor may invite BJP to form the government. Meanwhile, President Ram Nath Kovind said that the 12 Champion services sectors hold a huge potential to boost economic growth, create employment and for drawing global attention and investment. But, the market ended on a negative note as the recovery was not enough to push it in the positive terrain. Anxiety spread among the street with a report stating that the total investment via participatory notes (P-notes) into Indian capital markets plunged to nearly 9-year low of Rs 1 lakh crore in April amid stringent norms put in place by the regulator Sebi to check misuse of these instruments. According to the SEBI data, the total value of P-note investments in Indian markets - equity, debt, and derivatives - slumped to a low of 1,00,245 at April-end from Rs 1,06,403 crore at the end of the preceding month.  

Traders were seen piling up positions in IT, Realty and FMCG stocks, while selling was witnessed in Pharma, Metal and Auto sector stocks. The top gainers from the F&O segment were The Karnataka Bank, Jaiprakash Associates and Hindustan Unilever. On the other hand, the top losers were Reliance Communications, Syndicate Bank and Punjab National Bank.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 2.05% and reached 13.43. The 50-share Nifty was down by 60.75 points to settle at 10741.10.

Nifty May 2018 futures closed at 10761.25 on Wednesday, at a premium of 20.15 points over spot closing of 10741.10, while Nifty June 2018 futures ended at 10772.80, at a premium of 31.70 points over spot closing. Nifty May futures saw a contraction of 0.43 million (mn) units, taking the total outstanding open interest (OI) to 23.60 mn units. The near month derivatives contract will expire on May 31, 2018.

From the most active contracts, Punjab National Bank May 2018 futures traded at a premium of 0.05 points at 75.75 compared with spot closing of 75.70. The numbers of contracts traded were 38,003.

ITC May 2018 futures traded at a discount of 4.40 points at 281.95 compared with spot closing of 286.35. The numbers of contracts traded were 22,718.

Tata Steel May 2018 futures traded at a premium of 2.45 points at 624.35 compared with spot closing of 621.90. The numbers of contracts traded were 19,933.

State Bank of India May 2018 futures traded at a discount of 0.85 points at 242.05 compared with spot closing of 242.90. The numbers of contracts traded were 19,541.

ICICI Bank May 2018 futures traded at a premium of 1.35 points at 298.30 compared with spot closing of 296.95. The numbers of contracts traded were 19,058.

Among Nifty calls, 10800 SP from the May month expiry was the most active call with an addition of 0.48 million open interests. Among Nifty puts, 10700 SP from the May month expiry was the most active put with a contraction of 0.30 million open interests. The maximum OI outstanding for Calls was at 11000 SP (6.09 mn) and that for Puts was at 10500 SP (5.53 mn). The respective Support and Resistance levels of Nifty are: Resistance 10787.80---- Pivot Point 10743.75--- Support --- 10697.05.

The Nifty Put Call Ratio (PCR) finally stood at 1.24 for May month contract. The top five scrips with highest PCR on OI were Asian Paint (1.68), Dish TV (1.53), Axis Bank (1.47), Infibeam Incorporation (1.38) and ICICI Bank (1.18).

Among most active underlying, ITC witnessed a contraction of 1.04 million units of Open Interest in the May month futures contract, followed by Reliance Industries witnessing an addition of 1.84 million units of Open Interest in the May month contract, ICICI Bank witnessed an addition of 1.66 million units of Open Interest in the May month contract, Hindalco Industries witnessed an addition of 2.25 million units of Open Interest in the May month contract and State Bank of India witnessed a contraction of 0.76 million units of Open Interest in the May month future contract.