Nifty ends lower on Friday

Logging losses of 0.43%, key Indian index Nifty ended in red terrain on last trading day of the week. The index started the day marginally higher, supported by CRISIL Research’s report that revenues of corporates are expected to log a robust 12.1% year-on-year growth in the second quarter of FY 2019, nearly twice the 6.4% growth in the corresponding quarter of last fiscal. Some comfort also came after the Commerce Ministry removed the value limit for exports through post but has fixed Rs 5 lakh cap in case of overseas shipments through courier services. However, the Nifty soon turned volatile, amid SBI Ecowrap report stating that the Reserve Bank of India (RBI) is expected to hike its key lending rate by 25 basis points in October. According to the report, the expected rate hike might not be the last one in the current financial year.

In last leg of the trade, the market attempted recovery but failed to enter into green terrain, on the back of weak cues from European markets. Traders were cautious with the World Trade Organization’s (WTO) statement that escalating trade tensions and tighter credit market conditions in important markets would moderate the growth of global merchandise trade to 3.7% in 2019 from 3.9% in 2018. The multilateral trade body also said that trade volume growth should slow to 3.7% in 2019 as global GDP growth dips to 2.9%. Market pared most of its losses in dying hour of trade, but it was not enough to bring index back into green terrain. The street overlooked Finance Minister Arun Jaitley’s statement that the ongoing trade war may have created initial instability, but will gradually open up opportunities for India as a bigger trading and manufacturing base.

Traders were seen piling up positions in Fin Service, FMCG and Bank stocks, while selling was witnessed in Metal, Realty and Auto. The top gainers from the F&O segment were Can Fin Homes, L&T Finance Holdings and IDBI Bank. On the other hand, the top losers were Infibeam Avenues, Jain Irrigation Systems and Jindal Steel & Power. In the index option segment, maximum OI continues to be seen in the 11,300-11,700 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 0.43% and reached 16.99. The 50-share Nifty was down by 47.10 points or 0.43% to settle at 10,930.45.

Nifty October 2018 futures closed at 10954.30 on Friday, at a premium of 23.85 points over spot closing of 10930.45, while Nifty November 2018 futures ended at 11001.90, at a premium of 71.45 points over spot closing. Nifty October futures saw an addition of 0.10 million (mn) units, taking the total outstanding open interest (OI) to 16.61 mn units. The near month derivatives contract will expire on October 25, 2018.

From the most active contracts, Yes Bank October 2018 futures traded at a premium of 1.20 points at 204.80 compared with spot closing of 203.60. The numbers of contracts traded were 48,019.

Indiabulls Housing Finance October 2018 futures traded at a premium of 8.95 points at 863.95 compared with spot closing of 855.00. The numbers of contracts traded were 34,343.

Infibeam Avenues October 2018 futures traded at a premium of 0.70 points at 58.60 compared with spot closing of 57.90. The numbers of contracts traded were 33,677.

Tata Steel October 2018 futures traded at a premium of 2.30 points at 582.10 compared with spot closing of 579.80. The numbers of contracts traded were 26,285.

Reliance Industries October 2018 futures traded at a premium of 8.85 points at 1263.20 compared with spot closing of 1254.35. The numbers of contracts traded were 25,647.      

Among Nifty calls, 11200 SP from the October month expiry was the most active call with an addition of 0.34 million open interests. Among Nifty puts, 10800 SP from the October month expiry was the most active put with an addition of 0.36 million open interests. The maximum OI outstanding for Calls was at 11,500 SP (2.75mn) and that for Puts was at 11,000 SP (2.94mn). The  respective  Support  and  Resistance  levels  of  Nifty  are:  Resistance  11,026.27  ----  Pivot  Point  10,938.28  ---  Support  ---  10,842.47.

The Nifty Put Call Ratio (PCR) finally stood at 1.08 for October month contract. The top five scrips with highest PCR on OI were Cholamandalam Investment and Finance (3.38), PVR (2.53), Berger Paints India (2.17), Ramco Cements (2.00) and Repco Home Finance (1.87).

Among most active underlying, Reliance Industries witnessed an addition of 1.52 million units of Open Interest in the October month futures contract, followed by Yes Bank witnessing a contraction of 0.23 million units of Open Interest in the October month contract, State Bank of India witnessed a contraction of 0.01 million units of Open Interest in the October month contract, Bajaj Finance witnessed a contraction of 0.0004 million units of Open Interest in the October month contract and Tata Steel witnessed a contraction of 1.86 million units of Open Interest in the October month future contract.