Nifty bleed over 2% amid weak global clues

Bears make a comeback as Nifty50 ended the Thursday’s trading day with sharp losses of over 2% mirroring weak global clues amid rising trade concerns and expectation of rate hikes in the United States. The barometer started on a negative note as market participants remained cautions with a report stating that private equity and venture capital (PE/VC) investments in India declined 23% to $6.7 billion in the third quarter of this year as investors adopted a cautious approach. Traders remained concerned with Federation of Indian Export Organisations (FIEO) President Ganesh Gupta’s statement that the delay in Goods and Services Tax (GST) refunds is mainly impacting small exporters who provide jobs in labour-intensive sectors.

Nifty extended its losses in the last hour of trade as investors maintained a cautious approach after United Nations’ latest report noted that India lost $80 billion from natural disasters in 20 years and also ranks fourth among the top 10 countries that reported economic losses due to disasters. Sentiments remained concerned with International Monetary Fund Managing Director Christine Lagarde warning countries of the perils of a trade or a currency war, saying they could be detrimental to global growth and hurt innocent bystanders. Traders failed to draw any sense of relief from a report that the government will develop a Skill Index to encourage competition between districts and improve their skill development and training performance.

All the sectoral indices ended in red on the NSE. The top gainers from the F&O segment were Hindustan Petroleum Corporation, Mangalore Refinery and Petrochemicals and Multi Commodity Exchange of India. On the other hand, the top losers were NIIT Technologies, Infibeam Avenues and Indiabulls Housing Finance. 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 increased by 14.74% and reached 20.54. The 50-share Nifty was down by 225.45 points or 2.16% to settle at 10,234.65.

Nifty October 2018 futures closed at 10252.05 on Thursday, at a premium of 17.40 points over spot closing of 10234.65, while Nifty November 2018 futures ended at 10299.95, at a premium of 65.30 points over spot closing. Nifty October futures saw a contraction of 0.04 million (mn) units, taking the total outstanding open interest (OI) to 19.70 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 0.30 points at 241.30 compared with spot closing of 241.00. The numbers of contracts traded were 64,645.

Reliance Industries October 2018 futures traded at a premium of 1.55 points at 1091.55 compared with spot closing of 1090.00. The numbers of contracts traded were 35,653.

Bajaj Finance October 2018 futures traded at a discount of 8.20 points at 2164.80 compared with spot closing of 2173.00. The numbers of contracts traded were 35,647.

Hindustan Petroleum Corporation October 2018 futures traded at a discount of 1.50 points at 208.50 compared with spot closing of 210.00. The numbers of contracts traded were 29,669.

State Bank of India October 2018 futures traded at a premium of 1.55 points at 263.25 compared with spot closing of 261.70. The numbers of contracts traded were 28,654.

Among Nifty calls, 10500 SP from the October month expiry was the most active call with an addition of 0.95 million open interests. Among Nifty puts, 10,000 SP from the October month expiry was the most active put with a contraction of 0.01 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.95mn) and that for Puts was at 10,000 SP (3.78mn). The respective Support and Resistance levels of Nifty are: Resistance 10,334.20 ---- Pivot Point 10,236.40 --- Support --- 10,136.85.

The Nifty Put Call Ratio (PCR) finally stood at 0.84 for October month contract. The top five scrips with highest PCR on OI were Page Industries (4.00), Bosch (2.00), Berger Paints India (1.37), Ajanta Pharma (1.31) and Repco Home Finance (1.25).

Among most active underlying, Reliance Industries witnessed an addition of 0.08 million units of Open Interest in the October month futures contract, followed by Yes Bank witnessing an addition of 0.88 million units of Open Interest in the October month contract, Tata Consultancy Services witnessed an addition of 0.18 million units of Open Interest in the October month contract, Bajaj Finance witnessed a contraction of 0.44 million units of Open Interest in the October month contract and State Bank of India witnessed an addition of 4.30 million units of Open Interest in the October month future contract.