Nifty ends lower on easing Services PMI data

Continuing its losing streak for third consecutive session, key Indian equity benchmark Nifty ended in red on Wednesday, amid weak global cues. After a cautious start, the index traded lackluster throughout the session, as the National Council of Applied Economic Research’s (NCAER) business confidence index (N-BCI) fell by 12.9% in July over April this year on a quarter-on-quarter basis on account of worsening of business sentiments across various segments. NCAER said the decline in the N-BCI on a year-on-year basis works out to be 15.9%. Domestic sentiments also got hit after India’s services sector activity fell in the month of August from July’s 21-month peak, primarily due to the weakest growth in new work. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index dropped to 51.5 in August from 54.2 in July, signaling the slowest growth in the current sequence. Besides, the Nikkei India Composite PMI Output Index which measures both manufacturing and services too fell to 51.9 in August from 54.1 in July.

The trade was also negative with a private report that India’s growth rate is expected to moderate this fiscal despite a strong start in the April-June quarter largely owing to tighter financial conditions, limited fiscal headroom and upcoming elections. Some concerns also came after the National Stock Exchange (NSE) raised concern over potential for large-scale cyber-attacks on financial market infrastructure and called for setting up the standards to bring about the change through talent empowerment and investment in innovation. However, in the last leg of the trade, the Nifty managed to trim its losses, supported by Commerce and Industry Minister Suresh Prabhu’s statement that the proposed new industrial policy, to be released soon, would help link domestic industry with the global supply chain.

All the sectoral indices ended in red on the NSE except Metal, Pharma and Auto. The top gainers from the F&O segment were Muthoot Finance, Reliance Infrastructure and Biocon. On the other hand, the top losers were Bharat Electronics, Engineers India and InterGlobe Aviation. In the index option segment, maximum OI continues to be seen in the 11,600-12,000 calls and 11,300 -11,600 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 1.03% and reached 13.64. The 50-share Nifty was down by 43.35 points or 0.38% to settle at 11,476.95.

Nifty September 2018 futures closed at 11518.25 on Wednesday, at a premium of 41.30 points over spot closing of 11476.95, while Nifty October 2018 futures ended at 11557.85, at a premium of 80.90 points over spot closing. Nifty September futures saw an addition of 1.37 million (mn) units, taking the total outstanding open interest (OI) to 26.84 mn units. The near month derivatives contract will expire on September 27, 2018.

From the most active contracts, Bharat Electronics September 2018 futures traded at a premium of 1.20 points at 95.20 compared with spot closing of 94.00. The numbers of contracts traded were 29,258.

Reliance Industries September 2018 futures traded at a premium of 7.80 points at 1233.80 compared with spot closing of 1226.00. The numbers of contracts traded were 27,317.

Yes Bank September 2018 futures traded at a premium of 1.45 points at 345.50 compared with spot closing of 344.05. The numbers of contracts traded were 24,015.

Tata Motors September 2018 futures traded at a discount of -0.50 points at 268.25 compared with spot closing of 268.75. The numbers of contracts traded were 23,357.

State Bank of India September 2018 futures traded at a premium of 1.75 points at 298.65 compared with spot closing of 296.90. The numbers of contracts traded were 21,005.

Among Nifty calls, 11600 SP from the August month expiry was the most active call with an addition of 1.00 million open interests. Among Nifty puts, 11400 SP from the August month expiry was the most active put with an addition of 0.44 million open interests. The maximum OI outstanding for Calls was at 11,800 SP (4.18mn) and that for Puts was at 11,400 SP (3.88mn). The respective Support and Resistance levels of Nifty are: Resistance 11,548.45 ---- Pivot Point 11,471.15 --- Support --- 11,399.65.

The Nifty Put Call Ratio (PCR) finally stood at 1.09 for August month contract. The top five scrips with highest PCR on OI were Repco Home Finance (1.64), Axis Bank (1.26), Dewan Housing Finance Corporation (1.10), Infibeam Avenues (1.04) and Tata Consultancy Services (1.01).

Among most active underlying, Reliance Industries witnessed an addition of 1.75 million units of Open Interest in the September month futures contract, followed by Adani Enterprises witnessing a contraction of 4.78 million units of Open Interest in the September month contract, State Bank of India witnessed a contraction of 0.57 million units of Open Interest in the September month contract, Bajaj Finance witnessed an addition of 0.10 million units of Open Interest in the September month contract and Infosys witnessed an addition of 0.50 million units of Open Interest in the September month future contract.