Nifty snaps 3-day gaining streak; ends below 10,850 level

Snapping three day gaining streak, the local benchmark -- Nifty -- closed Thursday’s session on negative note with losses of around 50 points, as market participants’ risk appetite got a hit from negative global cues after the US Federal Reserve raised interest rates for the second time this year and hinted at two more hikes in 2018. The index traded lackluster throughout the session, as traders were cautious with a report showing that India’s CAD, has jumped over three times to $48.7 billion, or 1.9% of the country’s GDP, in the last financial year (FY18) from $14.4 billion or 0.6% in the previous year on account of higher trade deficit ($41.6 billion) brought about by a larger increase in merchandise imports relative to exports. Sentiments also remained pessimistic with a report highlighting that Wholesale price inflation climbed to 4.43% in May 2018 from 3.18% in April 2018 and 2.26% during the corresponding month of the previous year. Investors were also concerned with State Bank of India’s (SBI) latest report stating that India has only a decade to get into the developed country tag and will need to broaden its base in the sphere of education, failing which the much-hailed 'demographic dividend' could actually turn into a disadvantage by 2030. But, market managed to pare some of their losses in last hour of trade as investors took some solace with report that Fitch Ratings has raised India’s gross domestic product (GDP) growth forecast to 7.4 per cent for FY19 as against a growth estimation of 7.3 per cent earlier. The rating agency has also projected a GDP growth of 7.5 per cent for FY20. Traders also got some relief with Commerce and industry minister Suresh Prabhu’s statement that India’s purchases of commercial aircraft and gas from the US would help bridge the trade deficit between the two countries even as they agreed to hold official talks soon to address trade and economic irritants between them.

Traders were seen piling up positions in Auto and Pharma stocks, while selling was witnessed in IT, Media and Metal sector stocks. The top gainers from the F&O segment were Aurobindo Pharma, Hexaware Technologies and Jaiprakash Associates. On the other hand, the top losers were MindTree, India Cements and Reliance Power. In the index option segment, maximum OI continues to be seen in the 10,800-11,000 calls and 10,500-10,700 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 4.27% and reached 12.09. The 50-share Nifty was down by 48.65 points or 0.45% to settle at 10,808.05.

Nifty June 2018 futures closed at 10813.90 on Thursday, at a premium of 5.85 points over spot closing of 10808.05, while Nifty July 2018 futures ended at 10825.85, at a premium of 17.8 points over spot closing.  Nifty June futures saw a contraction of 0.68 million (mn) units, taking the total outstanding open interest (OI) to 23.87 mn units. The near month derivatives contract will expire on June 28, 2018.

From the most active contracts, Sun Pharmaceutical Industries June 2018 futures traded at a premium of 0.55 points at 560.20 compared with spot closing of 559.65. The numbers of contracts traded were 19,455.

State Bank of India June 2018 futures traded at a premium of 0.85 points at 283.70 compared with spot closing of 282.85. The numbers of contracts traded were 19,445.

Lupin June 2018 futures traded at a discount of 3.25 points at 899.75 compared with spot closing of 903.00. The numbers of contracts traded were 18,841.

Reliance Industries June 2018 futures traded at a discount of 1.90 points at 1005.10 compared with spot closing of 1007.00. The numbers of contracts traded were 18,044.

Indiabulls Housing Finance June 2018 futures traded at a premium of 8.65 points at 1192.85 compared with spot closing of 1184.20. The numbers of contracts traded were 17,090.  

Among Nifty calls, 10900 SP from the June month expiry was the most active call with an addition of 0.55 million open interests. Among Nifty puts, 10800 SP from the June month expiry was the most active put with a contraction of 0.32 million open interests. The maximum OI outstanding for Calls was at 11000 SP (4.14 mn) and that for Puts was at 10700 SP (4.95 mn). The respective Support and Resistance levels of Nifty are: Resistance 10836.65---- Pivot Point 10805.10--- Support --- 10776.50.

The Nifty Put Call Ratio (PCR) finally stood at 1.21 for June month contract. The top five scrips with highest PCR on OI were Cummins India (1.68), Just Dial (1.49), SIEMENS (1.25), SBI (1.15) and Manappuram Finance (1.11).

Among most active underlying, Reliance Industries witnessed an addition of 0.52 million units of Open Interest in the June month futures contract, followed by State Bank of India witnessing an addition of 0.33 million units of Open Interest in the June month contract, Tata Consultancy Services witnessed an addition of 0.17 million units of Open Interest in the June month contract, HDFC Bank witnessed a contraction of 0.09 million units of Open Interest in the June month contract and Sun Pharmaceutical Industries witnessed an addition of 0.17 million units of Open Interest in the June month future contract.