Nifty ends lower for fourth straight session

The local equity benchmark Nifty ended lower for fourth straight session on the last trading day of the week. The index started on a negative note and continued southward journey throughout the session, amid private report stating that Reserve Bank of India is likely to keep policy rates unchanged in the forthcoming monetary policy review, but will have a hawkish tone on concerns over inflation and as crude oil prices remain elevated. The market participants also got cautious with private report stating that crude oil prices may rise further in the coming months, following which India’s current account deficit will be around 2.4% in 2018- 19. Separately, India’s oil imports from Iran surged to 640,000 barrels per day (bpd) in April, its highest level since October 2016, according to data from shipping and industry sources, as refiners raised purchases ahead of looming US sanctions against Tehran. Investors failed to take any sense of relief from UN’s report that India’s economy is projected to grow 7.6% in fiscal year 2018-19, remaining the fastest growing economy in the world, as robust private consumption and benefits from past reforms help the country’s GDP gain momentum but sustained recovery in private investment remains a crucial challenge. The market-men also overlooked Niti Aayog CEO Amitabh Kant’s statement that crony capitalism in India will come to an end with the new bankruptcy code though it was facing some teething troubles. Meanwhile, in a major political development, the Supreme Court held a hearing in the Karnataka government formation matter, directing that the Bharatiya Janata Party (BJP) leader and the state’s new chief minister, B S Yeddyurappa, must conduct the floor test on Saturday at 4 pm.

All the sectoral indices ended in red on the NSE except FMCG. The top gainers from the F&O segment were Colgate Palmolive, Bajaj Finance and Tech Mahindra. On the other hand, the top losers were Strides Shasun, SRF and Reliance Naval and Engineering. 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 4.68% and reached 14.03. The 50-share Nifty was down by 86.30 points or 0.81% to settle at 10,596.40.

Nifty May 2018 futures closed at 10597.05 on Friday, at a premium of 0.65 points over spot closing of 10596.40, while Nifty June 2018 futures ended at 10605.95, at a premium of 9.55 points over spot closing.  Nifty May futures saw an addition of 0.54 million (mn) units, taking the total outstanding open interest (OI) to 24.06 mn units.

The near month derivatives contract will expire on May 31, 2018.
From the most active contracts, Bajaj Finance May 2018 futures traded at a premium of 10.25 points at 2149.25 compared with spot closing of 2139.00. The numbers of contracts traded were 44,838.

Voltas May 2018 futures traded at a premium of 0.35 points at 553.10 compared with spot closing of 552.75. The numbers of contracts traded were 28,561.

Strides Shasun May 2018 futures traded at a premium of 7.55 points at 386.90 compared with spot closing of 379.35. The numbers of contracts traded were 22,151.

Bajaj Auto May 2018 futures traded at a premium of 8.00 points at 2793.00 compared with spot closing of 2785.00. The numbers of contracts traded were 18,521.

Tata Steel May 2018 futures traded at a premium of 2.60 points at 593.85 compared with spot closing of 591.25. The numbers of contracts traded were 16,963. 

Among Nifty calls, 10700 SP from the May month expiry was the most active call with an addition of 0.71 million open interests. Among Nifty puts, 10600 SP from the May month expiry was the most active put with a contraction of 0.50 million open interests. The maximum OI outstanding for Calls was at 11000 SP (5.84mn) and that for Puts was at 10500 SP (5.37mn). The respective Support and Resistance levels of Nifty are: Resistance 10,651.20 ---- Pivot Point 10,620.15 --- Support --- 10565.35.

The Nifty Put Call Ratio (PCR) finally stood at 1.04 for May month contract. The top five scrips with highest PCR on OI were Asian Paint (1.65), Hindustan Unilever (1.39), Dish TV (1.39), Infibeam Incorporation (1.30) and AXIS Bank (1.28).

Among most active underlying, Bajaj Finance witnessed a contraction of 0.56 million units of Open Interest in the May month futures contract, followed by Reliance Industries witnessing an addition of 0.79 million units of Open Interest in the May month contract, Voltas witnessed an addition of 0.17 million units of Open Interest in the May month contract, Bajaj Auto witnessed an addition of 0.16 million units of Open Interest in the May month contract and Maruti Suzuki witnessed a contraction of 0.07 million units of Open Interest in the May month future contract.