Nifty ends with deep losses; beaches 11,400 mark

The local equity benchmark Nifty ended lower on Monday, breaching a crucial psychological level of 11,400. The index opened on pessimistic note and further continued its lackluster trade throughout the session, weighted down by ICRA’s latest report which highlighted that states are likely to miss fiscal consolidation targets in the current financial year (FY19), on the back of various majors like funding of crop loan waivers, election-related spending and the flood relief. Some concerns also came with a private report stating that the government's rupee depreciation arresting measures announced Friday may not drive fund inflows and are a negative from a longer term perspective as they increase short term debt.

Domestic sentiments remained negative with another private report stating that India’s world-beating stock market run is over. It has downgraded domestic stocks to the equivalent of a hold rating from buy. This is the first time it has lowered Indian stocks since 2014. The street took note of another private report stating that ahead of the festive season, the surge in petrol rates has left consumers scrambling and cutting household expenses to adjust with the price hike. The market participants failed to get any sense of relief with Finance Minister Arun Jaitley’s statement that the government is confident of meeting its fiscal deficit target of 3.3% of gross domestic product (GDP) in the fiscal year 2018-19.

All the sectoral indices ended in red on the NSE except Realty and IT. The top gainers from the F&O segment were Suzlon Energy, Balrampur Chini Mills and Mangalore Refinery and Petrochemicals. On the other hand, the top losers were ICICI Prudential Life Insurance, Bata India and Manappuram Finance. 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 4.71% and reached 14.49. The 50-share Nifty was down by 137.45 points or 1.19% to settle at 11,377.75.

Nifty September 2018 futures closed at 11407.70 on Monday, at a premium of 29.95 points over spot closing of 11377.75, while Nifty October 2018 futures ended at 11445.65, at a premium of 67.90 points over spot closing. Nifty September futures saw a contraction of 0.25 million (mn) units, taking the total outstanding open interest (OI) to 26.43 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 6.55 points at 1230.55 compared with spot closing of 1224.00. The numbers of contracts traded were 21,689.

Yes Bank September 2018 futures traded at a premium of 1.40 points at 318.90 compared with spot closing of 317.50. The numbers of contracts traded were 18,629.

Tata Steel September 2018 futures traded at a premium of 2.45 points at 618.70 compared with spot closing of 616.25. The numbers of contracts traded were 17,090.

Aurobindo Pharma September 2018 futures traded at a premium of 0.75 points at 793.45 compared with spot closing of 792.70. The numbers of contracts traded were 16,695.

Jindal Steel & Power September 2018 futures traded at a premium of 1.35 points at 238.85 compared with spot closing of 237.50. The numbers of contracts traded were 15,022.

Among Nifty calls, 11500 SP from the September month expiry was the most active call with an addition of 0.84 million open interests. Among Nifty puts, 11400 SP from the September month expiry was the most active put with a contraction of 0.37 million open interests. The maximum OI outstanding for Calls was at 11,800 SP (4.10mn) and that for Puts was at 11,400 SP (3.69mn). The respective Support and Resistance levels of Nifty are: Resistance 11,439.50 ---- Pivot Point 11,403.20 --- Support --- 11,341.45.

The Nifty Put Call Ratio (PCR) finally stood at 1.03 for September month contract. The top five scrips with highest PCR on OI were Oracle Financial Services Software (1.67), Repco Home Finance (1.41), Shree Cement (1.00), DLF (0.93) and Muthoot Finance (0.85).

Among most active underlying, Reliance Industries witnessed an addition of 0.35 million units of Open Interest in the September month futures contract, followed by State Bank of India witnessing an addition of 0.48 million units of Open Interest in the September month contract, Bajaj Finance witnessed a contraction of 0.19 million units of Open Interest in the September month contract, Aurobindo Pharma witnessed an addition of 0.08 million units of Open Interest in the September month contract and Maruti Suzuki India witnessed an addition of 0.02 million units of Open Interest in the September month future contract.