Indian equity benchmark Nifty ended the session in negative zone on Thursday for the second straight session, due to roll-over of long position in Futures & Options (F&O) segment. The index made a negative opening and traded lackluster during the day, amid report showing that the Goods and Services Tax (GST) investigation wing has detected tax evasion of over Rs 2,000 crore in two months, and data analysis reveals that only 1% of over 1.11 crore registered businesses pay 80% of the taxes. Domestic sentiments remained downbeat with outgoing chief economic adviser Arvind Subramanian’s statement that apart from high oil prices, the biggest headwind for India’s growth prospects was stigmatised capitalism, or the view that the private sector could not be trusted.
Further, in second half of the session, the Nifty extended its losses on the back of negative cues from global markets and heavy selling pressure on the street. Adding some worries, the US has issued a strict warning and threatened all countries including India and China to stop oil imports from Iran or face sanctions. Investors shrugged off Moody’s Investor Service’s latest report stating that India is among the countries least vulnerable to currency pressures as a result of a stronger dollar. The rating agency also noted that the country is less dependent on foreign-currency borrowing to fund its debt burden and this limits the risk of currency depreciation transmitting into materially weaker debt affordability. The market participants even overlooked the Indian Meteorological Department’s latest report that monsoon will cover the entire country in the next 2-3 days.
All the sectoral indices ended in red on the NSE except Metal. The top gainers from the F&O segment were CG Power and Industrial Solutions, Jaiprakash Associates and Strides Shasun. On the other hand, the top losers were Jain Irrigation Systems, Tech Mahindra and Jet Airways. In the index option segment, maximum OI continues to be seen in the 10,700-10,800 calls and 10,400-10,500 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 3.24% and reached 13.94. The 50-share Nifty was down by 82.30 points or 0.77% to settle at 10,589.10.
Nifty July 2018 futures closed at 10571.10 on Thursday, at a discount of 18.00 points over spot closing of 10589.10, while Nifty August 2018 futures ended at 10592.55, at a premium of 3.45 points over spot closing. Nifty July futures saw an addition of 7.07 million (mn) units, taking the total outstanding open interest (OI) to 18.79 mn units. The near month derivatives contract will expire on July 26, 2018.
From the most active contracts, Tata Motors July 2018 futures traded at a premium of 1.05 points at 265.00 compared with spot closing of 263.95. The numbers of contracts traded were 36,529.
HDFC Bank July 2018 futures traded at a discount of 7.40 points at 2119.10 compared with spot closing of 2126.50. The numbers of contracts traded were 30,589.
ICICI Bank July 2018 futures traded at a premium of 0.65 points at 271.40 compared with spot closing of 270.75. The numbers of contracts traded were 23,165.
Infosys July 2018 futures traded at a discount of 1.00 points at 1283.30 compared with spot closing of 1284.30. The numbers of contracts traded were 21,655.
Tata Steel July 2018 futures traded at a discount of 5.55 points at 541.00 compared with spot closing of 546.55. The numbers of contracts traded were 21,380.
Among Nifty calls, 10700 SP from the July month expiry was the most active call with an addition of 1.27 million open interests. Among Nifty puts, 10600 SP from the July month expiry was the most active put with an addition of 1.09 million open interests. The maximum OI outstanding for Calls was at 10700 SP (5.88 mn) and that for Puts was at 10500 SP (3.66 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,656.30 ---- Pivot Point 10,607.00 --- Support --- 10539.80.
The Nifty Put Call Ratio (PCR) finally stood at 1.06 for July month contract. The top five scrips with highest PCR on OI were Dewan Housing Finance Corporation (2.29), Indiabulls Housing Finance (2.20), Capital First (1.70), Jain Irrigation Systems (1.66) and Zee Entertainment Enterprises (1.62).
Among most active underlying, HDFC Bank witnessed an addition of 6.26 million units of Open Interest in the July month futures contract, followed by Reliance Industries witnessing an addition of 10.84 million units of Open Interest in the July month contract, State Bank of India witnessed an addition of 17.14 million units of Open Interest in the July month contract, ICICI Bank witnessed an addition of 26.26 million units of Open Interest in the July month contract and Tata Consultancy Services witnessed an addition of 3.78 million units of Open Interest in the July month future contract.
