Nifty ends marginally in red; below 10,800 mark

Key Indian equity benchmark Nifty ended in red terrain on Monday with marginal losses of 17.85 points. The index made a cautious start and traded choppy throughout the session, amid report that India’s trade deficit widened to $14.62 billion during the month under review as against $13.84 billion in May 2017, the highest in nearly four months mainly because of rising oil imports. Domestic sentiments also got hit with a private FDI Report 2018 stating that the number of greenfield FDI projects in India during the year fell sharply by 21% to 637. The US has surpassed India to become the top destination for greenfield FDI investment in 2017. Traders were also worried with rating agency Moody’s sounding a note of caution that any reduction in excise duty on petrol and diesel would adversely affect fiscal deficit unless it is matched by a commensurate cut in expenditure. Observing that fiscal consolidation would be closely watched for assigning the sovereign rating, Moody’s said India’s biggest challenge is its fiscal strength which is relatively low as compared to -- Baa -- rated peers. However, losses were limited as India’s merchandise exports grew to a six-month high of 20.18% in the month of May 2018, boosted by a rise in receipts of petroleum, engineering and pharmaceutical products.  Besides, the street got some relief with a report that Reserve Bank of India eased investment norms for foreign portfolio investors (FPIs) in debt, especially into individual large corporates, a move that can help attract more overseas flows and thereby help arrest the recent fall in the rupee on one hand and also lift the recent fall in demand for corporate bonds. Some comfort came with Piyush Goyal’s statement that the government is hopeful of achieving double-digit gross domestic product (GDP) growth in the country by the fourth quarter of the ongoing financial year. He also added that that government is committed to meet the fiscal deficit target of 3.3% for the current fiscal.

All the sectoral indices ended in red on the NSE, except Auto, Pharma and Bank. The top gainers from the F&O segment were Jaiprakash Associates, Bata India and Hindustan Petroleum Corporation. On the other hand, the top losers were Torrent Power, NCC and PC Jeweller. In the index option segment, maximum OI continues to be seen in the 10,800-11,000 calls and 10,600-10,700 puts indicating this is the trading range expectation.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 2.57% and reached 12.38. The 50-share Nifty was down by 17.85 points or 0.17% to settle at 10,799.85.

Nifty June 2018 futures closed at 10789.60 on Monday, at a discount of 10.25 points over spot closing of 10799.85, while Nifty July 2018 futures ended at 10800.50, at a premium of 0.65 points over spot closing. Nifty June futures saw an addition of 0.24 million (mn) units, taking the total outstanding open interest (OI) to 24.88 mn units. The near month derivatives contract will expire on June 28, 2018.

From the most active contracts, ICICI Bank June 2018 futures traded at a discount of 1.05 points at 292.95 compared with spot closing of 294.00. The numbers of contracts traded were 25,150.

Tata Steel June 2018 futures traded at a premium of 2.15 points at 560.35 compared with spot closing of 558.20. The numbers of contracts traded were 22,964.
Dr. Reddy's Laboratories June 2018 futures traded at a discount of 14.20 points at 2389.00 compared with spot closing of 2403.20. The numbers of contracts traded were 22,214.

Strides Shasun June 2018 futures traded at a discount of 0.15 points at 406.15 compared with spot closing of 406.30. The numbers of contracts traded were 17,915.

Vedanta June 2018 futures traded at a premium of 0.95 points at 232.50 compared with spot closing of 231.55. The numbers of contracts traded were 15,818. 

Among Nifty calls, 10800 SP from the June month expiry was the most active call with an addition of 0.20 million open interests. Among Nifty puts, 10800 SP from the June month expiry was the most active put with contraction of 0.05 million open interests. The maximum OI outstanding for Calls was at 11000 SP (4.68 mn) and that for Puts was at 10700 SP (4.96 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,824.25 ---- Pivot Point 10,805.80 --- Support --- 10781.40.

The Nifty Put Call Ratio (PCR) finally stood at 1.16 for June month contract. The top five scrips with highest PCR on OI were Just Dial (1.15), Cummins India (1.46), Dr Reddy's Laboratories (1.26), Andhra Bank (1.26) and Sun Pharmaceutical (1.08).

Among most active underlying, Tata Consultancy Services witnessed a contraction of 0.37 million units of Open Interest in the June month futures contract, followed by ICICI Bank witnessing a contraction of 5.95 million units of Open Interest in the June month contract, Reliance Industries witnessed a contraction of 0.19 million units of Open Interest in the June month contract, Tata Steel witnessed an addition of 0.68 million units of Open Interest in the June month contract and Dr. Reddy's Laboratories witnessed an addition of 0.02 million units of Open Interest in the June month future contract.