Nifty logs 1% losses; settles below 10,450 mark

Continuing its losing streak, Indian equity benchmark Nifty ended lower on Wednesday below its crucial psychological level of 10,450, with losses of 1.01%. The index made a negative start, as anxiety spread on the street with a report that fuel prices hit a fresh record high on Tuesday as petrol prices rose 30 paise to Rs 84.70 per litre in Mumbai. Similarly, diesel prices rose 27 paise to Rs 72.48 per litre in Mumbai. Further, in the last hour of the trade, the Nifty extended losses sharply to close near intraday low point, as the investors got cautious with Union Finance Minister P Chidambaram criticising the Centre for the fuel price hike and claimed that the rate can be reduced by Rs 25 per litre but the government is not doing it. The market participants failed to get any sense of relief from Employment Provident Fund Organisation’s (EPFO) latest ‘Overall Payroll Data’ report showing that India created 39.36 lakh new jobs in seven months period till March 2018. As per the report, total 6,13,134 new payrolls were created during March 2018 as against 5,89,034 created in the previous month, registering a growth of 4.09%. Traders also shrugged off report that the agriculture ministry released the Model Contract Farming Act, 2018, which lays emphasis on protecting the interests of farmers, considering them as weaker of the two parties entering into a contract. Investors even overlooked a private report stating that an open data ecosystem will impact India’s GDP by $22 billion, or the equivalent of two times the amount raised through the sale of 4G spectrum in 2017. The report claims that an open data ecosystem has the power to double farmers’ income by 2022, provide Universal Health coverage and provide microloans to three million plus micro, small and medium enterprises among other benefits.

All the sectoral indices ended in red on the NSE except PSU Bank. The top gainers from the F&O segment were IDBI Bank, Andhra Bank and State Bank of India. On the other hand, the top losers were Hindustan Petroleum, Vedanta and Balrampur Chini Mills. In the index option segment, maximum OI continues to be seen in the 10,800-11,000 calls and 10,200-10,400 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 4.08% and reached 14.15. The 50-share Nifty was down by 106.35 points or 1.01% to settle at 10,430.35.

Nifty May 2018 futures closed at 10426.60 on Wednesday, at a discount of 3.75 points over spot closing of 10430.35, while Nifty June 2018 futures ended at 10442.85, at a premium of 12.50 points over spot closing. Nifty May futures saw an addition of 0.04 million (mn) units, taking the total outstanding open interest (OI) to 23.08 mn units. The near month derivatives contract will expire on May 31, 2018.

From the most active contracts, State Bank of India May 2018 futures traded at a discount of 0.65 points at 262.80 compared with spot closing of 263.45. The numbers of contracts traded were 61,836.

Tata Steel May 2018 futures traded at a premium of 0.20 points at 541.45 compared with spot closing of 541.25. The numbers of contracts traded were 30,255.

Tata Motors May 2018 futures traded at a premium of 0.60 points at 310.00 compared with spot closing of 309.40. The numbers of contracts traded were 25,540.

Vedanta May 2018 futures traded at a premium of 2.20 points at 252.70 compared with spot closing of 250.50. The numbers of contracts traded were 22,309.

Strides Shasun May 2018 futures traded at a discount of 2.75 points at 403.10 compared with spot closing of 405.85. The numbers of contracts traded were 21,709.

Among Nifty calls, 10600 SP from the May month expiry was the most active call with an addition of 0.43 million open interests. Among Nifty puts, 10500 SP from the May month expiry was the most active put with a contraction of 0.64 million open interests. The maximum OI outstanding for Calls was at 10800 SP (5.54mn) and that for Puts was at 10400 SP (3.63mn). The respective Support and Resistance levels of Nifty are: Resistance 10,503.33 ---- Pivot Point 10,460.57 --- Support --- 10387.58.

The Nifty Put Call Ratio (PCR) finally stood at 0.86 for May month contract. The top five scrips with highest PCR on OI were Dish TV (1.42), Asian Paint (1.35), State Bank of India (1.35), Just Dial (1.29) and Axis Bank (1.20).

Among most active underlying, State Bank of India witnessed an addition of 0.35 million units of Open Interest in the May month futures contract, followed by Tata Steel witnessing an addition of 1.43 million units of Open Interest in the May month contract, Reliance Industries witnessed a contraction of 0.90 million units of Open Interest in the May month contract, Tata Motors witnessed a contraction of 2.51 million units of Open Interest in the May month contract and Ashok Leyland witnessed a contraction of 8.26 million units of Open Interest in the May month future contract.