Nifty ends on negative note on Thursday

Indian equity benchmark Nifty ended the session on a negative note on Thursday, tracking weak trend in the global markets. After a optimistic start, the index turned volatile, amid new World Bank’s study report stating that the government’s demonetisation during the third quarter of 2016-17 took away up to 7.3 percentage points of growth in the country’s Gross Domestic Product (GDP) for that period only, in districts dominated by informal activities. Traders took note of a recent ASSOCHAM-Ashvin Parekh Advisory Services LLP (APAS) joint study stating that a developed corporate bond market is the need of the hour for India as an 8% economic growth cannot be achieved without a robust corporate capex cycle, more so as sole reliance on bank loans is not warranted, particularly when bank lending has been squeezed. Adding some worries, Minister of State for Statistics and Programme Implementation Vijay Goel has said that out of 1,315 infrastructure projects monitored by the government, as many as 245 projects are reporting time overruns, 345 are showing cost overruns and 98 are showing both time and cost overruns.

However, further fall remained restricted, with the Asian Development Bank’s (ADB) latest report stating that Indian economy is on track to meet fiscal year 2018 projected growth of 7.3% and will further accelerate to 7.6% in 2019. Meanwhile, the government has initiated as many as 214 anti-dumping probes up to December 2017 against China, with which India has a huge trade deficit.

All the sectoral indices ended in red on the NSE except FMCG and PSU Bank. The top gainers from the F&O segment were Adani Power, Adani Enterprises and Bank of India. On the other hand, the top losers were PC Jeweller, MindTree and Jain Irrigation Systems. In the index option segment, maximum OI continues to be seen in the 10,800-11,100 calls and 10,700-11,000 puts indicating this is the trading range expectation.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 0.66% and reached 13.59. The 50-share Nifty was down by 23.35 points or 0.21% to settle at 10,957.10.

Nifty July 2018 futures closed at 10973.55 on Thursday, at a premium of 16.45 points over spot closing of 10957.10, while Nifty August 2018 futures ended at 10988.30, at a premium of 31.20 points over spot closing. Nifty July futures saw a contraction of 0.62 million (mn) units, taking the total outstanding open interest (OI) to 23.89 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 discount of 0.15 points at 106.05 compared with spot closing of 106.20. The numbers of contracts traded were 42,507.

Bajaj Finance July 2018 futures traded at a premium of 8.80 points at 2519.80 compared with spot closing of 2511.00. The numbers of contracts traded were 36,772.

Tata Steel July 2018 futures traded at a premium of 2.75 points at 499.85 compared with spot closing of 497.10. The numbers of contracts traded were 30,657.

MindTree July 2018 futures traded at a discount of 8.30 points at 971.30 compared with spot closing of 979.60. The numbers of contracts traded were 28,097.

Hindalco Industries July 2018 futures traded at a discount of 0.85 points at 198.65 compared with spot closing of 199.50. The numbers of contracts traded were 23,571. 

Among Nifty calls, 11000 SP from the July month expiry was the most active call an addition of 0.84 million open interests. Among Nifty puts, 10900 SP from the July month expiry was the most active put with an addition of 0.62 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.17 mn) and that for Puts was at 10,800 SP (4.62 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,997.25 ---- Pivot Point 10,966.35 --- Support --- 10926.20.

The Nifty Put Call Ratio (PCR) finally stood at 1.37 for July month contract. The top five scrips with highest PCR on OI were Adani Power (1.94), Adani Enterprises (1.61), Reliance Industries (1.20) Just Dial (1.11) and Yes Bank (1.04).

Among most active underlying, Bajaj Finance witnessed an addition of 0.14 million units of Open Interest in the July month futures contract, followed by Reliance Industries witnessing a contraction of 0.32 million units of Open Interest in the July month contract, MindTree witnessed a contraction of 0.75 million units of Open Interest in the July month contract, Kotak Mahindra Bank witnessed a contraction of 0.34 million units of Open Interest in the July month contract and Ashok Leyland witnessed a contraction of 2.96 million units of Open Interest in the July month future contract.