Nifty ends near day’s low; loses over 100 points

Breaching a crucial psychological level of 11,250, Indian equity benchmark Nifty ended the session near day’s low on Thursday, with losses of over 100 points. The index made a lackluster start and remained in tight grip of bear throughout the session, with a report stating that the Reserve Bank of India (RBI) hiked interest rates for the second consecutive time and cited a spike in inflation as one of key risks going ahead and expects it to touch 5% in first quarter of financial year 2019-20 (Q1FY20). Traders also got worried with EEPC India chairman Ravi Sehgal’s statement that the 25 bps increase in the interest rates by the RBI is a big negative for exporters, as they would become less competitive in a tough global market that is already facing the threat of tariff war.

Domestic sentiments remained downbeat with a report stating that Goods and services tax (GST) collection rose in July but stayed well below the government’s target of Rs 1 trillion for a third month in succession of the current financial year (starting April 1). The market participants failed to get any sense of relief with a private report stating that India's economic growth momentum is likely to pick up further in the April-June period and the country is expected to clock GDP growth of 7.5 per cent in this financial year. Investors also overlooked Finance Minister Piyush Goyal’s statement that GST revenues will go up in the coming months on improved compliance and market demand.

All the sectoral indices ended in red on the NSE except Metal and Pharma. The top gainers from the F&O segment were Jet Airways (India), NBCC (India) and InterGlobe Aviation. On the other hand, the top losers were Marico, Adani Power and Kaveri Seed Company. In the index option segment, maximum OI continues to be seen in the 11,200-11,600 calls and 10,800 -11,200 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 0.20% and reached 12.55. The 50-share Nifty was down by 101.50 points or 0.89% to settle at 11,244.70.

Nifty August 2018 futures closed at 11282.30 on Thursday, at a premium of 37.60 points over spot closing of 11244.70, while Nifty September 2018 futures ended at 11305.30, at a premium of 60.60 points over spot closing. Nifty August futures saw a contraction of 0.41 million (mn) units, taking the total outstanding open interest (OI) to 25.47 mn units. The near month derivatives contract will expire on August 30, 2018.

From the most active contracts, Tata Steel August 2018 futures traded at a premium of 5.15 points at 556.60 compared with spot closing of 551.45. The numbers of contracts traded were 23,086.

Tata Motors August 2018 futures traded at a premium of 1.35 points at 261.60 compared with spot closing of 260.25. The numbers of contracts traded were 21,655.

Reliance Industries August 2018 futures traded at a premium of 6.25 points at 1175.35 compared with spot closing of 1169.10. The numbers of contracts traded were 17,546.

Piramal Enterprises August 2018 futures traded at a premium of 5.70 points at 2855.70 compared with spot closing of 2850.00. The numbers of contracts traded were 16,169.

State Bank of India August 2018 futures traded at a premium of 1.25 points at 295.25 compared with spot closing of 294.00. The numbers of contracts traded were 16,010.

Among Nifty calls, 11500 SP from the August month expiry was the most active call with an addition of 0.59 million open interests. Among Nifty puts, 11200 SP from the August month expiry was the most active put with an addition of 0.04 million open interests. The maximum OI outstanding for Calls was at 11,500 SP (3.57mn) and that for Puts was at 11,000 SP (4.63mn). The respective Support and Resistance levels of Nifty are: Resistance 11,304.08 ---- Pivot Point 11,269.52 --- Support --- 11,210.13.

The Nifty Put Call Ratio (PCR) finally stood at 1.36 for August month contract. The top five scrips with highest PCR on OI were Godfrey Phillips India (1.78), Dish TV (1.50), ACC India (1.38), SREI Infrastructure Finance (1.26) and Reliance Industries (1.09).

Among most active underlying, Reliance Industries witnessed a contraction of 0.40 million units of Open Interest in the August month futures contract, followed by Maruti Suzuki India witnessing an addition of 0.10 million units of Open Interest in the August month contract, State Bank of India witnessed an addition of 0.67 million units of Open Interest in the August month contract, Tata Steel witnessed a contraction of 0.12 million units of Open Interest in the August month contract and ICICI Bank witnessed a contraction of 1.98 million units of Open Interest in the August month future contract.