Nifty ends lower on weak macroeconomic data; breaches 11,600 mark

Breaching a crucial psychological level of 11,600, the local equity benchmark Nifty ended in red terrain on Monday, with the losses of around 100 points. The market made an optimistic start and traded higher for the most part of the session, as India’s economic growth accelerated to a 15-quarter high of 8.2% during the first quarter (April-June) of the fiscal year 2018-19, as compared to growth rate of 5.59% in the first quarter of the previous financial year (2017-18) and 7.7% in the last quarter (Q4FY18). Some optimism also came with Controller General of Accounts’ (CGA) report that the direct tax collections grew by a meagre 6.6 per cent during April-July of the current financial year against the Budget target of 14.4 per cent for 2018-19. The growth was in comparison with the corresponding period of the last three years. Traders took note of Principal Economic Adviser in the Ministry of Finance, Sanjeev Sanyal’s statement that India will remain world’s fastest growing economy even if there is a hit in next reading.

However, in the last hour of trade, Nifty erased all its gains to close on a negative note, impacted by weak macroeconomic data. India’s core sector output grew at a slower pace of 6.6% in July 2018, from 7.6% in June 2018, while business activity in Indian manufacturing sector eased further in August 2018, for a second straight month amid slower gains in output and new orders.  As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance -fell to 51.7 in August from 52.3 in July. Traders sentiments’ also got hit with the Finance Ministry reporting that GST collections dropped to Rs 93,960 crore in August from Rs 96,483 crore in the previous month. 

All the sectoral indices ended in red on the NSE except Media and Metal. The top gainers from the F&O segment were PC Jeweller, Engineers India and Hindustan Construction Company. On the other hand, the top losers were Balkrishna Industries, Adani Enterprises and Adani Power. In the index option segment, maximum OI continues to be seen in the 11,600-12,000 calls and 11,400 -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 increased by 6.31% and reached 13.39. The 50-share Nifty was down by 98.15 points or 0.84% to settle at 11,582.35.

Nifty September 2018 futures closed at 11641.75 on Monday, at a premium of 59.40 points over spot closing of 11582.35, while Nifty October 2018 futures ended at 11681.15, at a premium of 98.80 points over spot closing. Nifty September futures saw an addition of 0.12 million (mn) units, taking the total outstanding open interest (OI) to 25.40 mn units. The near month derivatives contract will expire on September 27, 2018.

From the most active contracts, Reliance Industries September 2018 futures traded at a premium of 10.05 points at 1238.15 compared with spot closing of 1228.10. The numbers of contracts traded were 34,367.

Yes Bank September 2018 futures traded at a premium of 3.40 points at 341.70 compared with spot closing of 338.30. The numbers of contracts traded were 22,739.

Dr. Reddy's Laboratories September 2018 futures traded at a premium of 17.55 points at 2605.55 compared with spot closing of 2588.00. The numbers of contracts traded were 21,087.

Sun Pharma September 2018 futures traded at a premium of 0.15 points at 656.15 compared with spot closing of 656.00. The numbers of contracts traded were 20,648.

Tata Motors September 2018 futures traded at a premium of 1.10 points at 267.75 compared with spot closing of 266.65. The numbers of contracts traded were 18,626.

Among Nifty calls, 11800 SP from the August month expiry was the most active call with an addition of 0.73 million open interests. Among Nifty puts, 11700 SP from the August month expiry was the most active put with an addition of 0.24 million open interests. The maximum OI outstanding for Calls was at 11,800 SP (3.47mn) and that for Puts was at 11,600 SP (3.45mn). The respective Support and Resistance levels of Nifty are: Resistance 11,700.30 ---- Pivot Point 11,633.85 --- Support --- 11,515.90.

The Nifty Put Call Ratio (PCR) finally stood at 1.48 for August month contract. The top five scrips with highest PCR on OI were Repco Home Finance (1.52), Axis Bank (1.45), Infibeam Avenues (1.18), Dewan Housing Finance Corporation (1.12) and Manappuram Finance (1.05).

Among most active underlying, Reliance Industries witnessed an addition of 1.26 million units of Open Interest in the September month futures contract, followed by Bajaj Finance witnessing an addition of 0.35 million units of Open Interest in the September month contract, Maruti Suzuki India witnessed an addition of 0.17 million units of Open Interest in the September month contract, Yes Bank witnessed a contraction of 0.19 million units of Open Interest in the September month contract and Adani Enterprises witnessed a contraction of 2.44 million units of Open Interest in the September month future contract.