Nifty ends Tuesday’s choppy session in red

Key equity benchmark Nifty ended Tuesday’s trading session on a negative note with losses of around 47 points, due to widespread selling by investors in Auto and FMCG stocks and boiling crude oil prices. The index made a positive start on Union Home Minister Rajnath Singh’s statement that India will be among the top three economies of the world by 2030 if it kept up its current pace of growth. Investors also took some support with a report stating that India is all set to emerge as the 11th wealthiest country in the world as its personal financial wealth is projected to grow by 13% to $5 trillion by 2022 from the current $3 trillion. The domestic sentiments also remained upbeat with DIPP Secretary Ramesh Abhishek’s statement that India is taking several steps, including hiring more manpower and increasing use of technology, to reduce time for granting patents and trademarks.
 
However, market erased gains and soon turned choppy in the early noon session, amid credit rating agency CRISIL’s latest report that farmers’ income remain low in calendar year 2018, despite normal rainfall. Traders were taking note of a private report that with earnings growth in the three months to September expected to be subdued, the consensus forecasts of a 25% increase in earnings in 2018-19 are beginning to look increasingly optimistic. Sentiments also remained down-beat with report that India fared poorly, ranking 147 out of 157 countries, in terms of its commitment to reducing inequality. Investors remained jittery with International Monetary Fund (IMF) report stating that global growth has plateaued at 3.7% with its chief economist warning the world that there are clouds on the horizon and growth has proven to be less balanced than hoped.

Traders were seen piling up positions in Media, Pharma and Metal stocks, while selling was witnessed in Auto, FMCG and PSU Bank. The top gainers from the F&O segment were Dewan Housing Finance Corporation, Balrampur Chini Mills and Equitas Holdings. On the other hand, the top losers were Tata Motors, Just Dial and Titan Company. In the index option segment, maximum OI continues to be seen in the 10,800-11,200 calls and 9,900 -10,200 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 1.95% and reached 19.75. The 50-share Nifty was down by 47.00 points or 0.45% to settle at 10,301.05.

Nifty October 2018 futures closed at 10314.40 on Tuesday, at a premium of 13.35 points over spot closing of 10301.05, while Nifty November 2018 futures ended at 10363.65, at a premium of 62.60 points over spot closing. Nifty October futures saw a contraction of 0.78 million (mn) units, taking the total outstanding open interest (OI) to 19.54 mn units. The near month derivatives contract will expire on October 25, 2018.

From the most active contracts, Tata Motors October 2018 futures traded at a premium of 0.65 points at 185.20 compared with spot closing of 184.55. The numbers of contracts traded were 87,752.

Yes Bank October 2018 futures traded at a discount of 0.20 points at 225.25 compared with spot closing of 225.45. The numbers of contracts traded were 33,627.

Dewan Housing Finance Corporation October 2018 futures traded at a discount of 3.00 points at 243.00 compared with spot closing of 246.00. The numbers of contracts traded were 33,449.

Reliance Industries October 2018 futures traded at a premium of 9.80 points at 1092.80 compared with spot closing of 1083.00. The numbers of contracts traded were 32,060.

Bajaj Finance October 2018 futures traded at a discount of 3.40 points at 2057.60 compared with spot closing of 2061.00. The numbers of contracts traded were 30,444.

Among Nifty calls, 10500 SP from the October month expiry was the most active call with an addition of 0.28 million open interests. Among Nifty puts, 10,000 SP from the October month expiry was the most active put with an addition of 0.23 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.73mn) and that for Puts was at 10,000 SP (4.16mn). The respective Support and Resistance levels of Nifty are: Resistance 10,372.65 ---- Pivot Point 10,326.00 --- Support --- 10,254.40.

The Nifty Put Call Ratio (PCR) finally stood at 0.90 for October month contract. The top five scrips with highest PCR on OI were Page Industries (4.00), Bosch (2.00), Berger Paints India (1.47), Repco Home Finance (1.39) and Ajanta Pharma (1.30).

Among most active underlying, Reliance Industries witnessed a contraction of 0.26 million units of Open Interest in the October month futures contract, followed by Tata Motors witnessing a contraction of 5.00 million units of Open Interest in the October month contract, Bajaj Finance witnessed an addition of 0.05 million units of Open Interest in the October month contract, Yes Bank witnessed a contraction of 3.72 million units of Open Interest in the October month contract and ICICI Bank witnessed an addition of 2.25 million units of Open Interest in the October month future contract.