Nifty ends in red; breaches 11,450 mark

Snapping record setting spree, the local Indian equity benchmark Nifty ended last trading day of the week in red terrain, with losses of more than 40 points, amid weak global cues. The index remained sluggish throughout the session, as domestic sentiments got hit with the India Meteorological Department’s (IMD) latest report stating that 39% of the 681 districts in India have received less than normal rainfall in the week ended August 8. The trade was subdued as traders remained on sidelines ahead of industrial production data for June scheduled to be announced post market hours. Investors also got cautious with a private report that India's battered rupee will trade in a tight range in the coming year but not far from its historic low, hampered by higher oil prices and as trade tensions hurt emerging markets. The Indian currency has lost over 7% this year, with worries over the US-China trade conflict pushing it to a new record low of 69.122 against the dollar in July.

Further, in the last leg of trade, Nifty extended its losses to finish the trade near intraday low point, on the back of heavy sell-off in the recent gainers. The market participants failed to take any sense of relief with interim Finance Minister Piyush Goyal’s statement that he has once again issued hints towards a reduction in prices of more items under GST framework. Further he noted that the revenue collection will increase, GST on more items can be slashed. The street also overlooked a private report stating that the production and manufacturing sector saw a 60% rise year-on-year (Y-o-Y) in recruitment in July.

All the sectoral indices ended in red on the NSE except Auto, FMCG and IT. The top gainers from the F&O segment were Voltas, Eicher Motors and Berger Paints. On the other hand, the top losers were Jet Airways (India), Jaiprakash Associates and Jindal Steel & Power. 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 1.16% and reached 12.82. The 50-share Nifty was down by 41.20 points or 0.36% to settle at 11,429.50.

Nifty August 2018 futures closed at 11439.25 on Friday, at a premium of 9.75 points over spot closing of 11429.50, while Nifty September 2018 futures ended at 11470.65, at a premium of 41.15 points over spot closing. Nifty August futures saw an addition of 0.16 million (mn) units, taking the total outstanding open interest (OI) to 28.33 mn units. The near month derivatives contract will expire on August 30, 2018.

From the most active contracts, State Bank of India August 2018 futures traded at a premium of 1.00 point at 303.70 compared with spot closing of 302.70. The numbers of contracts traded were 1,08,760.

ICICI Bank August 2018 futures traded at a discount of 0.35 points at 327.40 compared with spot closing of 327.75. The numbers of contracts traded were 31,459.

Jet Airways (India) August 2018 futures traded at a discount of 3.25 points at 272.75 compared with spot closing of 276.00. The numbers of contracts traded were 20,646.

Axis Bank August 2018 futures traded at a discount of 1.05 points at 615.65 compared with spot closing of 616.70. The numbers of contracts traded were 19,951.

Tata Motors August 2018 futures traded at a premium of 1.25 points at 251.25 compared with spot closing of 250.00. The numbers of contracts traded were 17,045.

Among Nifty calls, 11500 SP from the August month expiry was the most active call with an addition of 0.43 million open interests. Among Nifty puts, 11400 SP from the August month expiry was the most active put with a contraction of 0.14 million open interests. The maximum OI outstanding for Calls was at 11,500 SP (4.15mn) and that for Puts was at 11,000 SP (5.07mn). The respective Support and Resistance levels of Nifty are: Resistance 11,465.62 ---- Pivot Point 11,442.63 --- Support --- 11,406.52.

The Nifty Put Call Ratio (PCR) finally stood at 1.52 for August month contract. The top five scrips with highest PCR on OI were Dish TV (1.90), Axis Bank (1.63), Adani Enterprises (1.38), Interglobe Aviation (1.38) and ICICI Bank (1.34).

Among most active underlying, State Bank of India witnessed a contraction of 0.45 million units of Open Interest in the August month futures contract, followed by ICICI Bank witnessing a contraction of 2.87 million units of Open Interest in the August month contract, Reliance Industries witnessed a contraction of 0.15 million units of Open Interest in the August month contract, Axis Bank witnessed an addition of 0.32 million units of Open Interest in the August month contract and Yes Bank witnessed a contraction of 1.05 million units of Open Interest in the August month future contract.