Losing around 100 points, Indian equity benchmark Nifty ended lower on Wednesday, amid weak cues from other Asian markets. The index made a slightly positive start, aided by NITI Aayog Vice Chairman Rajiv Kumar’s statement that the Indian economy will grow at the rate of at least 7.5% in the current fiscal (FY19) and added that the growth may even go as high as 7.8%. Investors took some comfort with Finance Secretary Hasmukh Adhia stating that Goods and Services Tax (GST) has entered a smooth phase within a year of its rollout, with pretty good tax compliance and the efforts will now be to simplify tax return forms.
However, the nifty soon turned negative and continued to trade in red till the end ahead of Futures and Options (F&O) derivative expiry for June series due tomorrow. Sentiments were down-beat as a report showed that the government debt increased 1.7% to over Rs 76.94 lakh crore in the last quarter of financial year 2017-18 over the previous quarter. The debt was Rs 75.66 lakh crore as of December 2017. At this level, the ratio of outstanding liabilities of the central government to GDP worked-out to be 45.9% at end-March 2018. Investors also got nervous with the Reserve Bank of India (RBI) calling for greater vigilance on the domestic macro-economic front saying conditions, which pushed Gross Domestic Product (GDP) growth to 7.7% in March 2018 quarter, are changing and warned that bad loan situation might worsen.
All the sectoral indices ended in red on the NSE except IT and Pharma. The top gainers from the F&O segment were Tech Mahindra, Bharti Infratel and Dabur India. On the other hand, the top losers were Adani Enterprises, Jaiprakash Associates and NBCC India. 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 increased by 5.57% and reached 13.51. The 50-share Nifty was down by 97.75 points or 0.91% to settle at 10,671.40.
Nifty June 2018 futures closed at 10673.45 on Wednesday, at a premium of 2.05 points over spot closing of 10671.40, while Nifty July 2018 futures ended at 10675.90, at a premium of 4.50 points over spot closing. Nifty June futures saw a contraction of 3.74 million (mn) units, taking the total outstanding open interest (OI) to 16.69 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 3.55 points at 2111.35 compared with spot closing of 2114.90. The numbers of contracts traded were 26,842.
ICICI Bank June 2018 futures traded at a discount of 0.10 points at 279.55 compared with spot closing of 279.65. The numbers of contracts traded were 26,736.
Tata Motors June 2018 futures traded at a premium of 0.85 points at 271.60 compared with spot closing of 270.75. The numbers of contracts traded were 25,605.
State Bank of India June 2018 futures traded at a premium of 0.90 points at 261.95 compared with spot closing of 261.05. The numbers of contracts traded were 24,103.
Reliance Industries June 2018 futures traded at a premium of 2.80 points at 966.50 compared with spot closing of 963.70. The numbers of contracts traded were 23,856.
Among Nifty calls, 10800 SP from the June month expiry was the most active call with an addition of 1.77 million open interests. Among Nifty puts, 10700 SP from the June month expiry was the most active put with a contraction of 1.89 million open interests. The maximum OI outstanding for Calls was at 10800 SP (5.57 mn) and that for Puts was at 10700 SP (3.15 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,753.80 ---- Pivot Point 10,703.10 --- Support --- 10620.70.
The Nifty Put Call Ratio (PCR) finally stood at 1.03 for June month contract. The top five scrips with highest PCR on OI were Repco Home (1.50), Cummins India (1.14), Grasim Industries (1.05), Dish TV (1.00) and Bharti Infratel (1.00).
Among most active underlying, Reliance Industries witnessed a contraction of 7.20 million units of Open Interest in the June month futures contract, followed by HDFC Bank witnessing a contraction of 4.42 million units of Open Interest in the June month contract, ICICI Bank witnessed a contraction of 24.78 million units of Open Interest in the June month contract, Tata Consultancy Services witnessed a contraction of 2.88 million units of Open Interest in the June month contract and State Bank of India witnessed a contraction of 18.38 million units of Open Interest in the June month future contract.
