Nifty ends in red zone; breaches 11,600 mark

Snapping a four-day winning streak, key equity benchmark Nifty ended the Friday’s trading session on a pessimistic note and ending below 11,600 mark. The index made an optimistic start to trade marginally in green, during early morning deals, as market-men took some encouragement with report that India will explore opportunities to increase exports of petroleum products, cars and motorcycles, and mobile phones to Kenya during the joint trade committee meeting of the two countries. But, Nifty failed to hold the momentum and soon turned negative with a report stating that the government has imposed standard conditions for as many as 25 sectors like steel, coal and oil, seeking environment clearance (EC) for expansion of existing projects or new projects. Some pessimism also came with a private report stating that India’s rural wage growth has slumped from an average of 11% in the financial years 2013-15 to a mere 0.45% in the financial years 2016-18, due to the negative impact of demonetization.

In the afternoon deals, market extended its losses, as traders remained cautious with a private report stating that Raghuram G. Rajan, who warned of a credit crisis in 2005 before it hit, is now cautioning that trade wars when combined with a build-up in leverage and high asset prices could result in a toxic mix that dragged global growth. Adding some concerns, another private report stated that the Goods and Services Tax (GST) collections may come in as a surprise for the government as collections for the month of July are likely to be lower on both year-on year basis and a month-on-month basis. As per the report, collections may range between Rs 89,000 crore and Rs 91,000 crore for July which are to be reported in August.

All the sectoral indices ended in red on the NSE except Media and Metal. The top gainers from the F&O segment were SREI Infrastructure Finance, Bharat Heavy Electricals and Balrampur Chini Mills. On the other hand, the top losers were Hexaware Technologies, Jaiprakash Associates and United Breweries. In the index option segment, maximum OI continues to be seen in the 11,400-11,700 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 decreased by 2.74% and reached 12.40. The 50-share Nifty was down by 25.65 points or 0.22% to settle at 11,557.10.

Nifty August 2018 futures closed at 11571.60 on Friday, at a premium of 14.50 points over spot closing of 11557.10, while Nifty September 2018 futures ended at 11610.85, at a premium of 53.75 points over spot closing. Nifty August futures saw a contraction of 0.74 million (mn) units, taking the total outstanding open interest (OI) to 29.53 mn units. The near month derivatives contract will expire on August 30, 2018.

From the most active contracts, Hexaware Technologies August 2018 futures traded at a premium of 2.55 points at 427.95 compared with spot closing of 425.40. The numbers of contracts traded were 27,827.

Axis Bank August 2018 futures traded at a premium of 1.90 points at 640.40 compared with spot closing of 638.50. The numbers of contracts traded were 23,941.

Reliance Industries August 2018 futures remain unchanged at 1277.00 compared with spot closing of 1277.00. The numbers of contracts traded were 23,636.

Yes Bank August 2018 futures traded at a premium of 1.40 points at 375.45 compared with spot closing of 374.05. The numbers of contracts traded were 18,694.

Tata Steel August 2018 futures traded at a premium of 1.75 points at 577.05 compared with spot closing of 575.30. The numbers of contracts traded were 18,678.

Among Nifty calls, 11600 SP from the August month expiry was the most active call with an addition of 0.39 million open interests. Among Nifty puts, 11500 SP from the August month expiry was the most active put with a contraction of 0.57 million open interests. The maximum OI outstanding for Calls was at 11,600 SP (3.92mn) and that for Puts was at 11,000 SP (4.17mn). The respective Support and Resistance levels of Nifty are: Resistance 11,597.13 ---- Pivot Point 11,564.57 --- Support --- 11,524.53.

The Nifty Put Call Ratio (PCR) finally stood at 1.45 for August month contract. The top five scrips with highest PCR on OI were Dish TV (2.26), Reliance Industries (1.45), JSW Steel (1.32), Havells India (1.29) and ACC (1.26).

Among most active underlying, Reliance Industries witnessed a contraction of 3.73 million units of Open Interest in the August month futures contract, followed by Axis Bank witnessing a contraction of 2.27 million units of Open Interest in the August month contract, State Bank of India witnessed a contraction of 2.33 million units of Open Interest in the August month contract, ICICI Bank witnessed a contraction of 8.72 million units of Open Interest in the August month contract and Yes Bank witnessed a contraction of 0.003 million units of Open Interest in the August month future contract.