Nifty sees sharp fall; ends near day’s low

Extending losses for the second straight session, the Indian equity benchmark Nifty ended Tuesday’s session near intraday low point. The index started the day slightly higher, supported by the Asian Development Bank’s (ADB) latest report stating that share of India in the Gross Domestic Product (GDP) of Asia and Pacific region moved up to 17.3% in 2017 from 14.6% in 2000. However, the Nifty soon turned sluggish and traded in red for rest of the session, amid private report showing that India’s economic growth is expected to moderate in the second half of this financial year after a strong first quarter, owing to tighter financial conditions, high oil prices and slowing global growth. It expects real GDP growth to slow to 7-7.3% in the second half of this fiscal from 8.2% in June 2018 quarter.

Domestic sentiments also got hit with India Meteorological Department’s (IMD) data report that the countrywide monsoon saw the highest rain deficiency of the season in August -- ironically the month when a large part of Kerala was submerged and many other states received excess rainfall. Adding some concerns, former RBI Governor Raghuram Rajan said that over optimistic bankers, slowdown in government decision making process and moderation in economic growth mainly contributed to the mounting bad loans. The market participants took note of industry chamber, ASSOCHAM’s statement that the most important factor responsible for rising petrol and diesel prices, at this point of time, is the global macro situation, impacting the entire pack of Emerging Markets, with India being no exception. However, it expressed hopes that the tax burden would be brought down to some extent. 

All the sectoral indices ended in red on the NSE. The top gainers from the F&O segment were Page Industries, Allahabad Bank and Coal India. On the other hand, the top losers were Power Finance Corporation, Max Financial Services and Ajanta Pharma. 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 increased by 0.84% and reached 15.33. The 50-share Nifty was down by 150.60 points or 1.32% to settle at 11,287.50.

Nifty September 2018 futures closed at 11336.25 on Tuesday, at a premium of 48.75 points over spot closing of 11287.50, while Nifty October 2018 futures ended at 11376.70, at a premium of 89.20 points over spot closing. Nifty September futures saw a contraction of 0.33 million (mn) units, taking the total outstanding open interest (OI) to 27.84 mn units. The near month derivatives contract will expire on September 27, 2018.

From the most active contracts, Yes Bank September 2018 futures traded at a premium of 1.60 points at 317.60 compared with spot closing of 316.00. The numbers of contracts traded were 24,852.

State Bank of India September 2018 futures traded at a premium of 1.95 points at 283.95 compared with spot closing of 282.00. The numbers of contracts traded were 22,861.

Bajaj Finance September 2018 futures traded at a premium of 8.80 points at 2608.80 compared with spot closing of 2600.00. The numbers of contracts traded were 22,329.

Axis Bank September 2018 futures traded at a premium of 3.55 points at 654.05 compared with spot closing of 650.50. The numbers of contracts traded were 22,307.

Reliance Industries September 2018 futures traded at a premium of 7.60 points at 1244.10 compared with spot closing of 1236.50. The numbers of contracts traded were 21,464.

Among Nifty calls, 11500 SP from the August month expiry was the most active call with an addition of 0.97 million open interests. Among Nifty puts, 11400 SP from the August month expiry was the most active put with a contraction of 0.26 million open interests. The maximum OI outstanding for Calls was at 11,800 SP (4.54mn) and that for Puts was at 11,400 SP (4.16mn). The respective Support and Resistance levels of Nifty are: Resistance 11,419.93 ---- Pivot Point 11,346.97 --- Support --- 11,214.53.

The Nifty Put Call Ratio (PCR) finally stood at 0.98 for August month contract. The top five scrips with highest PCR on OI were Repco Home Finance (1.76), Bosch (1.07), Axis Bank (1.05), Chennai Petroleum Corporation (1.00) and Shree Cement (1.00).

Among most active underlying, Reliance Industries witnessed a contraction of 0.59 million units of Open Interest in the September month futures contract, followed by Bajaj Finance witnessing a contraction of 0.14 million units of Open Interest in the September month contract, State Bank of India witnessed a contraction of 2.11 million units of Open Interest in the September month contract, Axis Bank witnessed an addition of 0.44 million units of Open Interest in the September month contract and Yes Bank witnessed an addition of 2.36 million units of Open Interest in the September month future contract.