Nifty ends lower amid weak global cues

Indian equity benchmark Nifty ended lower on Wednesday, with marginal losses amid weak global cues. Market started trading in red terrain as traders remained concerned with a report highlighting that hardening domestic fuel prices are likely to weigh on the Reserve Bank’s rate setting panel, MPC, at its 3-day meet from June 4. The monetary policy review will take into account the retail inflation which rose to 4.58% in April mainly on account of increasing prices of petrol and diesel. However, market pared all of their losses to enter into green terrain with a report stating that FICCI’s report that India’s GDP growth is expected at 7.1% for the January-March quarter of the last fiscal and 6.6% for the entire 2017-18. The Central Statistics Office (CSO) is scheduled to release GDP numbers for the fourth quarter as well as the 2017-18 fiscal on May 31. But, index failed to hold the gains and slipped into red terrain as Moody’s Investors Service has cut India's GDP growth forecast to 7.3% in 2018, from previous forecast of 7.5% due to higher oil prices and tighter financial conditions. It, however, kept growth expectation for 2019 unchanged at 7.5%.

Traders were seen piling up positions in PSU Bank, Metal and Bank, while selling was witnessed in Auto, FMCG and Pharma. The top gainers from the F&O segment were Reliance Communications, Torrent Power and Reliance Naval and Engineering. On the other hand, the top losers were Oil India, Ajanta Pharma and Just Dial. 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 2.60% and reached 13.41. The 50-share Nifty was down by 18.95 points or 0.18% to settle at 10,614.35.

Nifty May 2018 futures closed at 10604.50 on Wednesday, at a discount of 9.85 points over spot closing of 10614.35, while Nifty June 2018 futures ended at 10614.45, at a premium of 0.10 points over spot closing. Nifty May futures saw a contraction of 2.77 million (mn) units, taking the total outstanding open interest (OI) to 16.19 mn units. The near month derivatives contract will expire on May 31, 2018.

From the most active contracts, Jubilant Foodworks May 2018 futures traded at a discount of 11.35 points at 2502.65 compared with spot closing of 2514.00. The numbers of contracts traded were 26,710.

Tata Motors May 2018 futures traded at a discount of 0.05 points at 288.90 compared with spot closing of 288.95. The numbers of contracts traded were 25,100.

HDFC Bank May 2018 futures traded at a discount of 19.25 points at 2031.25 compared with spot closing of 2050.50. The numbers of contracts traded were 22,816.

State Bank of India May 2018 futures traded at a discount of 0.30 points at 266.65 compared with spot closing of 266.95. The numbers of contracts traded were 20,626.

ICICI Bank May 2018 futures traded at a premium of 0.35 points at 285.35 compared with spot closing of 285.00. The numbers of contracts traded were 20,015.

Among Nifty calls, 10600 SP from the May month expiry was the most active call with an addition of 0.66 million open interests. Among Nifty puts, 10500 SP from the May month expiry was the most active put with an addition of 0.79 million open interests. The maximum OI outstanding for Calls was at 10800 SP (5.10mn) and that for Puts was at 10500 SP (5.79mn). The respective Support and Resistance levels of Nifty are: Resistance 10,655.88 ---- Pivot Point 10,607.17 --- Support --- 10565.63.

The Nifty Put Call Ratio (PCR) finally stood at 1.19 for May month contract. The top five scrips with highest PCR on OI were Just Dial (1.59), Dish TV (1.53), State Bank of India (1.46), Pidilite Industries (1.44), and GAIL (1.31).

Among most active underlying, State Bank of India witnessed a contraction of 12.03 million units of Open Interest in the May month futures contract, followed by HDFC Bank witnessing a contraction of 3.25 million units of Open Interest in the May month contract, Reliance Industries witnessed a contraction of 8.03 million units of Open Interest in the May month contract, Jubilant Foodworks witnessed a contraction of 0.35 million units of Open Interest in the May month contract and ICICI Bank witnessed a contraction of 21.45 million units of Open Interest in the May month future contract.