Nifty ends in red terrain; slips below 10,650 mark

Key Indian equity benchmark Nifty ended in red terrain on Monday with cut of over half a percent. The index made a positive start as traders took some support with Prime Minister Narendra Modi’s statement that India’s economy will sustain a growth of 7.5 to 8% per year. He said the Indian government has kept its economic growth forecast for the current fiscal unchanged at 7.5%, buoyed by turnaround in manufacturing and pick up in investment. However, Nifty soon erased all its early gains and started trading flat with a negative bias, as domestic sentiments got hit after a private report stating that rising inflation and high crude oil prices will weigh on the minds of the six Monetary Policy Committee (MPC) members at their three-day meeting beginning on June 4 to decide the key policy rate. Anxiety also spread among traders with a report showing that foreign investors pulled out a massive Rs 29,714 crore from the capital markets in May, making it the biggest outflow in 18 months, primarily due to a surge in global crude prices. Markets extended losses, as some caution also prevailed with report that collections from the Goods and Services Tax in May fell to Rs 94,016 crore, from the Rs 1.03 lakh crore collected in April. Traders failed to get any relief from a report which stated the country’s Fiscal Deficit, the difference between total revenue and expenditure, has improved in the first month of the current financial year 2018-19, on the back of higher revenue and lower expenditure. As per the latest data released by the controller-general of accounts (CGA), April’s fiscal deficit was at 24.3% of the budget estimates, as against 37.6% for the same period of the last fiscal year. 

All the sectoral indices ended in red on the NSE except IT and Metal. The top gainers from the F&O segment were Steel Authority of India, Sun TV Network and Dr Reddy's Laboratories. On the other hand, the top losers were PC Jeweller, Bharat Heavy Electricals and India Cements. In the index option segment, maximum OI continues to be seen in the 10,700-11,000 calls and 10,200-10,500 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 2.30% and reached 13.88. The 50-share Nifty was down by 67.70 points or 0.63% to settle at 10,628.50.

Nifty June 2018 futures closed at 10598.70 on Monday, at a discount of 29.80 points over spot closing of 10628.50, while Nifty June 2018 futures ended at 10616.45, at a discount of 12.05 points over spot closing.  Nifty July futures saw an addition of 0.85 million (mn) units, taking the total outstanding open interest (OI) to 20.35 mn units. The near month derivatives contract will expire on June 28, 2018.

From the most active contracts, HDFC Bank June 2018 futures traded at a discount of 11.65 points at 2033.35 compared with spot closing of 2045.00. The numbers of contracts traded were 67,330.

Yes Bank June 2018 futures traded at a premium of 0.10 points at 343.10 compared with spot closing of 343.00. The numbers of contracts traded were 18,118.

PC Jeweller June 2018 futures traded at a discount of 0.05 points at 130.55 compared with spot closing of 130.60. The numbers of contracts traded were 17,471.

Tata Steel June 2018 futures traded at a premium of 3.40 points at 568.90 compared with spot closing of 565.50. The numbers of contracts traded were 16,657.

Reliance Industries June 2018 futures traded at a discount of 5.40 points at 936.10 compared with spot closing of 941.50. The numbers of contracts traded were 15,274.

Among Nifty calls, 10800 SP from the June month expiry was the most active call with an addition of 0.55 million open interests. Among Nifty puts, 10600 SP from the June month expiry was the most active put with an addition of 0.37 million open interests. The maximum OI outstanding for Calls was at 11000 SP (3.97mn) and that for Puts was at 10200 SP (3.53mn). The respective Support and Resistance levels of Nifty are: Resistance 10,726.42 ---- Pivot Point 10,672.38 --- Support --- 10574.47.

The Nifty Put Call Ratio (PCR) finally stood at 1.05 for June month contract. The top five scrips with highest PCR on OI were Dish TV (2.45), Max Financial Services (2.25), Ajanta Pharma (2.15), Ramco Cements (2.00) and Cummins India (1.90).

Among most active underlying, HDFC Bank witnessed an addition of 1.34 million units of Open Interest in the June month futures contract, followed by Reliance Industries witnessing a contraction of 0.31 million units of Open Interest in the June month contract, State Bank of India witnessed an addition of 1.35 million units of Open Interest in the June month contract, Tata Steel witnessed an addition of 0.61 million units of Open Interest in the June month contract and Maruti Suzuki witnessed a contraction of 0.01 million units of Open Interest in the June month future contract.