Breaching a crucial psychological level of 10,700, the local equity benchmark Nifty ended lower on Monday with the losses of more than half a percent. After a cautious start, the Nifty remained sluggish throughout the session, on the back of negative data reports from the Reserve Bank of India (RBI). As per the central bank, India’s external debt stood at $529.7 billion at the end of March 2018, recording an increase of $58.4 billion year-on-year, primarily on account of a rise in commercial borrowings, short-term debt and non-resident Indian (NRI) deposits, while India's foreign exchange reserves declined by $2.25 billion to $407.81 billion in the week to June 22 on account of fall in foreign currency assets. Adding some worries, India’s foreign direct investment (FDI) growth rate hit five-year low of 3% in 2017-18. According to the latest data of the Department of Industrial Policy and Promotion (DIPP) inflows grew by only 3% to $44.85 billion in 2017-18. Domestic sentiments also got hit with a report that India’s fiscal deficit has exceeded 55% of the Budget estimate in just first two months (April-May) of the current Year (FY19), though it is still lower than what was recorded in the same period last fiscal. According to the Controller General of Accounts (CGA) data, fiscal deficit during the same period of the previous financial year had stood at 68.3%.
However, the Nifty managed to trim some of their losses in the second half and came off its intraday low point, aided by positive economic data including manufacturing PMI and GST revenue collection. The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance -climbed from 51.2 in the previous month to 53.1 in June 2018, mainly led by the rise in new orders and output, while revenue collection under the Goods and Services Tax (GST) during the month of June 2018 increased to Rs 95,610 crore, as compared to previous month’s revenue of Rs 94,016 crore.
All the sectoral indices ended in red except IT and PSU Bank on the NSE. The top gainers from the F&O segment were CG Power and Industrial Solutions, Balkrishna Industries and GMR Infrastructure. On the other hand, the top losers were TV18 Broadcast, SREI Infrastructure Finance and Jindal Steel & Power. In the index option segment, maximum OI continues to be seen in the 10,800-11,000 calls and 10,500-10,600 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 3.34% and reached 13.37. The 50-share Nifty was down by 57 points or 0.53% to settle at 10,657.30.
Nifty July 2018 futures closed at 10658.25 on Monday, at a premium of 0.95 points over spot closing of 10,657.30, while Nifty August 2018 futures ended at 10677.70, at a premium of 20.40 points over spot closing. Nifty July futures saw an addition of 0.02 million (mn) units, taking the total outstanding open interest (OI) to 19.80 mn units. The near month derivatives contract will expire on July 26, 2018.
From the most active contracts, Tata Steel July 2018 futures traded at a discount of 5.60 points at 553.50 compared with spot closing of 559.10. The numbers of contracts traded were 36,171.
ICICI Bank July 2018 futures traded at a premium of 0.25 points at 277.55 compared with spot closing of 277.30. The numbers of contracts traded were 28,211.
Vedanta July 2018 futures traded at a premium of 2.90 points at 240.25 compared with spot closing of 237.35. The numbers of contracts traded were 27,232.
State Bank of India July 2018 futures traded at a premium of 0.45 points at 260.45 compared with spot closing of 260.00. The numbers of contracts traded were 20,366.
Tata Motors July 2018 futures traded at a premium of 1.60 points at 268.15 compared with spot closing of 266.55. The numbers of contracts traded were 18,506.
Among Nifty calls, 10700 SP from the July month expiry was the most active call with an addition of 0.23 million open interests. Among Nifty puts, 10600 SP from the July month expiry was the most active put with an addition of 0.19 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (3.68 mn) and that for Puts was at 10,600 SP (4.75mn). The respective Support and Resistance levels of Nifty are: Resistance 10,727.42---- Pivot Point 10,666.03--- Support --- 10,595.92.
The Nifty Put Call Ratio (PCR) finally stood at 1.13 for July month contract. The top five scrips with highest PCR on OI were Adani Power (1.57), Oil India (1.30), Federal Bank (1.25), Indiabulls Housing Finance (1.22) and DHFL (1.12).
Among most active underlying, Tata Steel witnessed an addition of 1.52 million units of Open Interest in the July month futures contract, followed by ICICI Bank witnessing an addition of 17.17 million units of Open Interest in the July month contract, Reliance Industries witnessed a contraction of 0.06 million units of Open Interest in the July month contract, State Bank of India witnessed a contraction of 0.71 million units of Open Interest in the July month contract and HDFC Bank witnessed an addition of 0.16 million units of Open Interest in the July month future contract.
