Nifty closes lower for second straight session

Key Indian equity benchmark Nifty ended lower for second straight session on Thursday, with marginal losses.  After a cautious start, index remained under pressure throughout the session, as the Reserve Bank of India (RBI) reiterated concerns over rising inflationary pressures this fiscal year due to global and domestic pressures and called for continuous vigil to keep them at bay. Some concerns also came with a report that foreign investors have pulled out $280 million from the Indian markets so far this year, while domestic institutional investors (DIIs) continue to invest more aggressively and have put in a staggering $10 billion. Domestic sentiments continued to remain dampened with Credit rating agency Moody’s Investors Service report highlighting 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. 

However, the Nifty managed to pare most of its losses in the last hour of trade, aided by Finance Minister Arun Jaitley’s statement that India is expected to surpass Britain next year to become world's fifth largest economy. Some relief also came with RBI’s latest annual report showing that it expects India’s economic growth rate to accelerate to 7.4% in the current financial year (FY19) on pick up in industrial activity and good monsoon. Some comfort came with the government’s statement that demonetisation of high-value currency notes in November 2016 achieved the objectives quite substantially even as the RBI  reported most of the demonetised currency was back with the banks.

Traders were seen piling up positions in FMCG, Pharma and Metal, while selling was witnessed in FIN Service, Auto and PSU Bank. The top gainers from the F&O segment were Bosch, Reliance Power and SREI Infrastructure Finance. On the other hand, the top losers were Kajaria Ceramics, Infibeam Avenues and InterGlobe Aviation. In the index option segment, maximum OI continues to be seen in the 11,700-12,000 calls and 11,300- 11,700 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 0.48% and reached 12.37. The 50-share Nifty was down by 15.10 points or 0.13% to settle at 11,676.80.

Nifty September 2018 futures closed at 11733.15 on Thursday, at a premium of 56.35 points over spot closing of 11676.80, while Nifty October 2018 futures ended at 11762.30, at a premium of 85.50 points over spot closing. Nifty September futures saw an addition of 5.70 million (mn) units, taking the total outstanding open interest (OI) to 23.75 mn units. The near month derivatives contract will expire on September 27, 2018. 

From the most active contracts, Tata Steel September 2018 futures traded at a premium of 4.05 points at 612.35 compared with spot closing of 608.30. The numbers of contracts traded were 24,832. 

ICICI Bank September 2018 futures traded at a premium of 1.45 points at 345.65 compared with spot closing of 344.20. The numbers of contracts traded were 23,473. 

Tata Motors September 2018 futures traded at a premium of 1.30 points at 261.20 compared with spot closing of 259.90. The numbers of contracts traded were 21,108. 

Reliance Industries September 2018 futures traded at a premium of 7.80 points at 1284.80 compared with spot closing of 1277.00. The numbers of contracts traded were 20,695. 

HDFC Bank September 2018 futures traded at a premium of 8.25 points at 2076.25 compared with spot closing of 2068.00. The numbers of contracts traded were 20,339.

Among Nifty calls, 11700 SP from the September month expiry was the most active call with an addition of 0.42 million open interests. Among Nifty puts, 11650 SP from the September month expiry was the most active put with an addition of 0.06 million open interests. The maximum OI outstanding for Calls was at 11,800 SP (2.25mn) and that for Puts was at 11,400 SP (2.73mn). The  respective  Support  and  Resistance  levels  of  Nifty  are:  Resistance  11,703.83  ----  Pivot  Point  11,671.77  ---  Support  ---  11,644.73.

The Nifty Put Call Ratio (PCR) finally stood at 1.12 for September month contract. The top five scrips with highest PCR on OI were Infibeam Avenues (2.16), Dewan Housing Finance Corporation (1.97), AXIS Bank (1.85), Cummins India (1.58) and Jain Irrigation Systems (1.39).

Among most active underlying, Reliance Industries witnessed an addition of 5.22 million units of Open Interest in the September month futures contract, followed by State Bank of India witnessing an addition of 18.15 million units of Open Interest in the September month contract, ICICI Bank witnessed an addition of 29.08 million units of Open Interest in the September month contract, JSW Steel witnessed an addition of 5.51 million units of Open Interest in the September month contract and Axis Bank witnessed an addition of 9.86 million units of Open Interest in the September month future contract.