Indian equity benchmark Nifty ended in red terrain on Monday, with losses of more than half a percent. The index made a cautious start to remain sluggish during the day, as domestic sentiments got hit with a report that that foreign investors have pulled out over Rs 14,500 crore from the Indian capital markets in June so far, primarily due to global trade war and hawkish commentary by the US Federal Reserve. The latest outflow has taken the total net withdrawal by foreign portfolio investors (FPIs) from the capital markets (equity and debt) to more than Rs 46,600 crore in this year so far. Some concerns also came with Reserve Bank of India’s (RBI) data report showing that India’s foreign exchange reserves fell by $3.03 billion to $410.070 billion as on June 15. Foreign currency assets, which form a key component of reserves, fell by $3.05 billion from the previous week to $385.333 billion.
Nifty weakened further in the last leg of the trade and settled the session near the intraday low point, amid weak cues from global markets. Sentiments on the street remained downbeat with a private report stating that goods and services tax (GST) has not delivered on the promised formalisation of the economy as yet, while the glitches in the one-nation-one-tax regime has increased the demand for cash. Traders failed to take any sense of relief with Union Minister Suresh Prabhu’s statement that India is trying to resolve trade disputes with several countries and is willing to create a new world trade order as it extends a hand of friendship to all. Investors also shrugged off Confederation of Indian Industry’s (CII) statement that Indian companies’ overseas investments are likely to go up, with the stable market conditions and the significant impact created by Indian companies on local economies.
All the sectoral indices ended in red on the NSE except IT. The top gainers from the F&O segment were Page Industries, UltraTech Cement and TVS Motor. On the other hand, the top losers were Tata Motors, Allahabad Bank and Idea Cellular. 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 4.24% and reached 12.53. The 50-share Nifty was down by 59.40 points or 0.55% to settle at 10,762.45.
Nifty June 2018 futures closed at 10757.65 on Monday, at a discount of 4.80 points over spot closing of 10762.45, while Nifty July 2018 futures ended at 10765.40, at a premium of 2.95 points over spot closing. Nifty June futures saw a contraction of 1.01 million (mn) units, taking the total outstanding open interest (OI) to 22.93 mn units. The near month derivatives contract will expire on June 28, 2018.
From the most active contracts, Tata Motors June 2018 futures traded at a premium of 1.40 points at 289.95 compared with spot closing of 288.55. The numbers of contracts traded were 30,332.
Sun Pharmaceutical June 2018 futures traded at a premium of 4.00 points at 572.40 compared with spot closing of 568.40. The numbers of contracts traded were 29,384.
Vedanta June 2018 futures traded at a premium of 0.65 points at 230.85 compared with spot closing of 230.20. The numbers of contracts traded were 25,139.
ICICI Bank June 2018 futures traded at a premium of 0.55 points at 290.25 compared with spot closing of 289.70. The numbers of contracts traded were 18,115.
Yes Bank June 2018 futures traded at a premium of 0.65 points at 333.95 compared with spot closing of 333.30. The numbers of contracts traded were 16,958.
Among Nifty calls, 10700 SP from the June month expiry was the most active call with a contraction of 1.01 million open interests. Among Nifty puts, 10800 SP from the June month expiry was the most active put with an addition of 1.30 million open interests. The maximum OI outstanding for Calls was at 11000 SP (5.49 mn) and that for Puts was at 10700 SP (4.69 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,811.32 ---- Pivot Point 10,782.18 --- Support --- 10733.32.
The Nifty Put Call Ratio (PCR) finally stood at 1.19 for June month contract. The top five scrips with highest PCR on OI were Repco Home (1.48), Cummins India (1.13), Manappuram Finance (1.11), Grasim Industries (1.08) and Ajanta Pharma (0.99).
Among most active underlying, Reliance Industries witnessed a contraction of 3.11 million units of Open Interest in the June month futures contract, followed by Sun Pharmaceutical witnessing a contraction of 8.61 million units of Open Interest in the June month contract, State Bank of India witnessed a contraction of 9.81 million units of Open Interest in the June month contract, HDFC Bank witnessed a contraction of 2.69 million units of Open Interest in the June month contract and Bajaj Finance witnessed a contraction of 0.55 million units of Open Interest in the June month future contract.
