Nifty ends flat with negative bias

Key Indian equity benchmark Nifty ended flat with a negative bias on the last trading day of the week. The index traded lackluster throughout the session, tracking weak global markets. Traders were pessimistic with Union Minister Dharmendra Pradhan’s statement that with petrol and diesel kept out of the purview of GST, the state owned oil industry is losing Rs 200 billion annually in terms of input credit. Some anxiety also came with Moody’s Investors Service’s statement that India could prune its capital expenditure to avoid any slippage of its fiscal deficit target of 3.3% of GDP in the current fiscal, but warned any reduction in the excise duty on petroleum products would exert negative pressure on the country’s sovereign credit profile. Adding some worries on the street, the government identified over 2.25 lakh companies and 7,191 LLPs which have not filed requisite financial statement for 2015-16 and 2016-17, and they may be struck off during the current financial year. However, in the last hour of the trade, the Nifty pared most of its losses, as traders got some solace with industry body Assocham’s statement that reducing taxes is the best solution to check the spurt in fuel prices which would also tremendously help India on the exports front. Some comfort also came with DIPP Secretary Ramesh Abhishek’s statement that foreign direct investment in India increased to $61.96 billion in 2017-18. He also said during the four years of the Modi government, foreign inflows jumped to $222.75 billion from $152 billion in the previous four-year period.

Traders were seen piling up positions in Media, Pharma and PSU Bank, while selling was witnessed in FMCG, Metal and Financial Sevices. The top gainers from the F&O segment were Sun Pharmaceutical, PVR and Andhra Bank. On the other hand, the top losers were Castrol India, Dalmia Bharat and Jet Airway. In the index option segment, maximum OI continues to be seen in the 10,800-11,000 calls and 10,400-10,600 puts indicating this is the trading range expectation.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 0.63% and reached 12.69. The 50-share Nifty was down by 0.70 points or 0.01% to settle at 10,767.65.

Nifty June 2018 futures closed at 10748.10 on Friday, at a discount of 19.55 points over spot closing of 10767.65, while Nifty June 2018 futures ended at 10764.10, at a discount of 3.55 points over spot closing.  Nifty July futures saw an addition of 0.53 million (mn) units, taking the total outstanding open interest (OI) to 22.36 mn units. The near month derivatives contract will expire on June 28, 2018.

From the most active contracts, Sun Pharmaceutical June 2018 futures traded at a premium of 0.60 points at 528.55 compared with spot closing of 527.95. The numbers of contracts traded were 49,068.

Tata Motors June 2018 futures traded at a premium of 1.40 points at 310.35 compared with spot closing of 308.95. The numbers of contracts traded were 30,608.

Strides Shasun June 2018 futures traded at a premium of 1.30 points at 359.10 compared with spot closing of 357.80. The numbers of contracts traded were 20,328.

Tata Steel June 2018 futures traded at a premium of 1.90 points at 600.90 compared with spot closing of 599.00. The numbers of contracts traded were 19,848.

Reliance Industries June 2018 futures traded at a discount of 3.65 points at 979.45 compared with spot closing of 983.10. The numbers of contracts traded were 19,125.

Among Nifty calls, 10800 SP from the June month expiry was the most active call with an addition of 0.22 million open interests. Among Nifty puts, 10700 SP from the June month expiry was the most active put with an addition of 0.38 million open interests. The maximum OI outstanding for Calls was at 11000 SP (4.26mn) and that for Puts was at 10600 SP (4.91mn). The respective Support and Resistance levels of Nifty are: Resistance 10,795.05 ---- Pivot Point 10,752.05 --- Support --- 10724.65.

The Nifty Put Call Ratio (PCR) finally stood at 1.15 for June month contract. The top five scrips with highest PCR on OI were Dish TV (2.33), Ramco Cements (2.25), Cummins India (1.72), Manappuram Finance (1.49) and Grasim Industries (1.34).

Among most active underlying, Sun Pharmaceutical witnessed a contraction of 3.18 million units of Open Interest in the June month futures contract, followed by Reliance Industries witnessing a contraction of 0.49 million units of Open Interest in the June month contract, Tata Motors witnessed a contraction of 4.25 million units of Open Interest in the June month contract, State Bank of India witnessed an addition of 2.21 million units of Open Interest in the June month contract and Bajaj Finance witnessed an addition of 0.26 million units of Open Interest in the June month future contract.