Nifty snaps record setting spree; ends with 0.40% losses

Snapping record setting spree, the key Indian equity benchmark Nifty ended the Wednesday’s session in red territory with the losses of 0.40%. After a cautious start, the index remained lackluster throughout the session, as domestic sentiments got hit with the credit rating agency, India Ratings’ latest report stating that the widening current account deficit (CAD), which is projected to cross 2.6% of GDP this year, coupled with the rupee plunge, is likely to increase borrowing costs for corporates and bring down the overall volume of fresh forex loans. The street also remained worried with a private report that the Indian economy is in for a rough ride, with rising oil prices set to continue weighing on its already-weakened currency, widen its deficit, and affect its growth outlook.

Further, in the last leg of trade, Nifty extended its losses to end near intraday low point, as Credit rating agency Moody's Investors Service report showed that there are risks of India breaching the 3.3% fiscal deficit target for the current financial year as higher oil prices will add to short-term fiscal pressures. Market remained under pressure also due to the Reserve Bank of India’s latest annual report that bad loans for the banking sector are likely to increase in 2018-19 from the current levels of around 11.5%. Investors paid no heed towards Care Ratings’ latest report betting on a higher GDP growth April-June quarter as compared to the last year. 

Traders were seen piling up positions in PSU Bank, Realty and Metal, while selling was witnessed in Media, Pharma and IT. The top gainers from the F&O segment were JSW Steel, Bosch and SRF. On the other hand, the top losers were InterGlobe Aviation, Adani Enterprises and Dalmia Bharat. 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 increased by 0.08% and reached 12.43. The 50-share Nifty was down by 46.60 points or 0.40% to settle at 11,691.90.

Nifty August 2018 futures closed at 11707.10 on Wednesday, at a premium of 15.20 points over spot closing of 11691.90, while Nifty September 2018 futures ended at 11749.85, at a premium of 57.95 points over spot closing. Nifty August futures saw a contraction of 5.65 million (mn) units, taking the total outstanding open interest (OI) to 16.20 mn units. The near month derivatives contract will expire on August 30, 2018.

From the most active contracts, JSW Steel August 2018 futures traded at a premium of 0.95 points at 398.75 compared with spot closing of 397.80. The numbers of contracts traded were 36,465.

Reliance Industries August 2018 futures traded at a premium of 2.60 points at 1296.50 compared with spot closing of 1293.90. The numbers of contracts traded were 35,421.

Yes Bank August 2018 futures traded at a premium of 0.35 points at 366.35 compared with spot closing of 366.00. The numbers of contracts traded were 32,355.

Axis Bank August 2018 futures traded at a premium of 1.95 points at 657.45 compared with spot closing of 655.50. The numbers of contracts traded were 28,049.

Vedanta August 2018 futures traded at a premium of 0.90 points at 228.85 compared with spot closing of 227.95. The numbers of contracts traded were 26,005.

Among Nifty calls, 11800 SP from the August month expiry was the most active call with an addition of 0.53 million open interests. Among Nifty puts, 11700 SP from the August month expiry was the most active put with a contraction of 1.13 million open interests. The maximum OI outstanding for Calls was at 11,800 SP (3.18mn) and that for Puts was at 11,000 SP (3.50mn). The respective Support and Resistance levels of Nifty are: Resistance 11,737.12 ---- Pivot Point 11,707.98 --- Support --- 11,662.77.

The Nifty Put Call Ratio (PCR) finally stood at 1.83 for August month contract. The top five scrips with highest PCR on OI were Repco Home Finance (2.32), Dish TV (2.22), AXIS Bank (1.40), SRF (1.26) and Reliance Industries (1.21).

Among most active underlying, Reliance Industries witnessed a contraction of 9.04 million units of Open Interest in the August month futures contract, followed by JSW Steel witnessing a contraction of 11.69 million units of Open Interest in the August month contract, State Bank of India witnessed a contraction of 19.53 million units of Open Interest in the August month contract, Yes Bank witnessed a contraction of 10.33 million units of Open Interest in the August month contract and Axis Bank witnessed a contraction of 9.45 million units of Open Interest in the August month future contract.