Nifty ends lower; breaches 11k mark

The local benchmark Nifty ended the Wednesday’s session on a pessimistic note, with losses of quarter a percent. The index made a positive start and continued to traded higher for first half of the session, aided by Confederation of Indian Industry’s (CII) president Rakesh Bharti Mittal’s statement that GDP growth at 7.5% plus was a very healthy and positive sign for Indian economy, noting that impact of sustained structural reforms is now being felt on the ground. Domestic sentiments also remained upbeat with the International Monetary Fund (IMF) saying that India’s Gross Domestic Product (GDP) growth remains quite robust into the future, despite marginally trimming the country’s growth projection for 2018 due to high oil prices and a tight monetary policy regime. Adding some support, a private report stated that inflation based on wholesale prices, which touched a 4-year high in June, seems to have peaked for this financial year, and is expected to glide down to around 4.1% by March 2019.

However, Nifty erased all of its gains in second half of the session, on the back of heavy selling by market participants. Traders got cautious after Lok Sabha Speaker Sumitra Mahajan accepted the no-confidence motion moved against the BJP Government on the first day of the Monsoon Session that began in Parliament on Wednesday. Some concerns also came with a private study report pointing out discrepancies in FDI data and also suggested that the RBI should regenerate foreign fund inflows and outflows data with detailed information at least for the past five years with a view to providing a more realistic picture of overseas investments. The street also took note of report highlighting that India’s import bill of crude oil and petroleum products swelled 57% to $12.73 billion in June as compared to the same month last year.

All the sectoral indices ended in red except IT on the NSE. The top gainers from the F&O segment were Indiabulls Housing Finance, Adani Enterprises and KPIT Technologies. On the other hand, the top losers were Ashok Leyland, Jindal Steel & Power and Hindustan Construction Company. In the index option segment, maximum OI continues to be seen in the 10,800-11,100 calls and 10,400-10,800 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 6.69% and reached 13.68. The 50-share Nifty was down by 27.60 points or 0.25% to settle at 10,980.45.

Nifty July 2018 futures closed at 10978.60 on Wednesday, at a discount of 1.85 points over spot closing of 10980.45, while Nifty August 2018 futures ended at 10994.95, at a premium of 14.50 points over spot closing. Nifty July futures saw a contraction of 0.52 million (mn) units, taking the total outstanding open interest (OI) to 24.52 mn units. The near month derivatives contract will expire on July 26, 2018.

From the most active contracts, Ashok Leyland July 2018 futures traded at a premium of 0.25 points at 110.70 compared with spot closing of 110.45. The numbers of contracts traded were 45,649.

Tata Steel July 2018 futures traded at a premium of 1.10 points at 505.10 compared with spot closing of 504.00. The numbers of contracts traded were 32,436.

HDFC Bank July 2018 futures traded at a premium of 7.60 points at 2182.65 compared with spot closing of 2175.05. The numbers of contracts traded were 19,569.

Reliance Industries July 2018 futures traded at a discount of 1.55 points at 1091.75 compared with spot closing of 1093.30. The numbers of contracts traded were 17,310.

State Bank of India July 2018 futures traded at a discount of 1 point at 259.50 compared with spot closing of 260.50. The numbers of contracts traded were 16,335.

Among Nifty calls, 11000 SP from the July month expiry was the most active call an addition of 0.50 million open interests. Among Nifty puts, 11000 SP from the July month expiry was the most active put with a contraction of 0.04 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (3.60 mn) and that for Puts was at 10,800 SP (4.38 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,052.33 ---- Pivot Point 11,004.32 --- Support --- 10,932.43.

The Nifty Put Call Ratio (PCR) finally stood at 1.39 for July month contract. The top five scrips with highest PCR on OI were Adani Power (1.62), Adani Enterprises (1.48), Reliance Industries (1.04), Tata Consultancy Services (1.03) and Just Dial (1.03).

Among most active underlying, Reliance Industries witnessed a contraction of 0.40 million units of Open Interest in the July month futures contract, followed by Ashok Leyland witnessing an addition of 12.90 million units of Open Interest in the July month contract, HDFC Bank witnessed a contraction of 0.43 million units of Open Interest in the July month contract, Tata Steel India witnessed a contraction of 1.20 million units of Open Interest in the July month contract and Hindustan Unilever witnessed an addition of 0.08 million units of Open Interest in the July month future contract.