Nifty ends lower with minor losses

The local equity benchmark Nifty ended Wednesday’s session lower with the minor losses of 13.65 points. The index made a firm start, as India’s fiscal deficit during the first five months (April-August) of the current fiscal (FY19) has shown improvement. The fiscal deficit stood at 94.7% of the Budget Estimate (BE) at August-end of FY19, better than 96.1% of BE at August-end of the last financial year. However, the market soon turned choppy, amid a private report stating that even though India’s economy is growing at a fast pace, the ‘higher educated’ are reporting the highest rate of unemployment against the national average. The report also revealed that the unemployment scenario is most ‘severe’ in the northern states of the country. The trade was negative for most part of the session, as street got cautious with another private report stating that after US, India is likely to suffer highest economic damage from climate change. The report further noted that Carbon dioxide emissions are costing the Indian economy up to $210 billion every year.

But, downside remained capped, as international development finance institution, Asian Development Bank (ADB) maintained India’s growth forecast at 7.3% for 2018. It also noted that the economy continues on a robust growth path and is likely to grow at 7.6% during 2019, as goods and services tax and demonetisation effects abate as expected. Traders also got some solace with the commerce and industry ministry stating that the government’s export promotion measures, implementation of minimum standards for imports, and continued healthy inflow of remittances by non-resident Indians will help control the country’s rising current account deficit (CAD). Some relief also came with Finance Minister Arun Jaitley’s statement that the new insolvency law, indirect tax regime and demonetization will help drive the country’s growth rate and sustain it at 8%.

Traders were seen piling up positions in Realty, Metal and Pharma stocks, while selling was witnessed in PSU Banks, IT and FMCG. The top gainers from the F&O segment were Reliance Communications, Bharat Electronics and Indiabulls Housing Finance. On the other hand, the top losers were KPIT Technologies, Balrampur Chini Mills and Repco Home Finance. In the index option segment, maximum OI continues to be seen in the 11,100-11,400 calls and 10,900 -11,200 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 2.43% and reached 17.08. The 50-share Nifty was down by 13.65 points or 0.12% to settle at 11,053.80.

Nifty September 2018 futures closed at 11062.45 on Wednesday, at a premium of 8.65 points over spot closing of 11053.80, while Nifty October 2018 futures ended at 11110.55, at a premium of 56.75 points over spot closing. Nifty September futures saw a contraction of 2.83 million (mn) units, taking the total outstanding open interest (OI) to 14.45 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 discount of 0.20 points at 223.50 compared with spot closing of 223.70. The numbers of contracts traded were 45,946.

Indiabulls Housing Finance September 2018 futures traded at a premium of 6.05 points at 999.05 compared with spot closing of 993.00. The numbers of contracts traded were 44,276.

Tata Motors September 2018 futures traded at a premium of 0.60 points at 233.95 compared with spot closing of 233.35. The numbers of contracts traded were 33,020.

Vedanta September 2018 futures traded at a premium of 0.45 points at 242.00 compared with spot closing of 241.55. The numbers of contracts traded were 32,269.

Tata Steel September 2018 futures traded at a premium of 2.10 points at 610.15 compared with spot closing of 608.05. The numbers of contracts traded were 26,962.

Among Nifty calls, 11100 SP from the September month expiry was the most active call with an addition of 0.52 million open interests. Among Nifty puts, 11000 SP from the September month expiry was the most active put with an addition of 0.13 million open interests. The maximum OI outstanding for Calls was at 11,200 SP (3.62mn) and that for Puts was at 11,000 SP (3.87mn). The  respective  Support  and  Resistance  levels  of  Nifty  are:  Resistance  11,135.22  ----  Pivot  Point  11,064.13  ---  Support  ---  10,982.72.

The Nifty Put Call Ratio (PCR) finally stood at 0.89 for September month contract. The top five scrips with highest PCR on OI were Godfrey Phillips India (1.20), Chennai Petroleum Corporation (1.05), Infibeam Avenues (1.01), Repco Home Finance (1.00) and Shree Cement (1.00).

Among most active underlying, Reliance Industries witnessed a contraction of 7.57 million units of Open Interest in the September month futures contract, followed by Yes Bank witnessing a contraction of 20.85 million units of Open Interest in the September month contract, State Bank of India witnessed an addition of 5.69 million units of Open Interest in the September month contract, Tata Steel witnessed a contraction of 9.31 million units of Open Interest in the September month contract and Maruti Suzuki India witnessed a contraction of 0.65 million units of Open Interest in the September month future contract.