Nifty succumbs to profit-booking; plunges over 130 points

Key equity benchmark Nifty failed to extend its winning run to the fourth day, as the barometer ended Wednesday’s trading session on a lower note, amid weak rupee and fresh rise in crude oil prices. The index performance was dragged by selling in Financial Services, Metal and Pharma stocks. The D-street made a firm opening, as market participants were encouraged with the Reserve Bank of India’s (RBI) forecast that the share of investments in gross domestic product (GDP) will rise to 33% by FY23 from 31.4% recorded in the last fiscal, suggesting that the upturn in the current investment cycle that started in FY17 could last for five more years. Some optimism also came with commerce ministry study showing that the extra US tariffs on its imports from China in the ongoing trade war have opened a window of opportunity for India to push for higher exports in 171 items - ranging from textiles to marine products - with additional outbound shipment potential of up to $8.7 billion a year.

However, the market pared all its early gains and entered into negative trajectory in second half of the trading session. Investors’ sentiments got hit with a report that the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) hit a nearly nine-and-a-half year low of Rs 79,548 crore in September 2018. The sentiments were pessimistic with Commerce and industry minister Suresh Prabhu saying that India is the ‘worst sufferer’ of declining trade and slow global economic growth as the country has a huge stake and its share in world trade is rising.

All the sectoral indices ended in red on the NSE except FMCG and IT. The top gainers from the F&O segment were NIIT Technologies, United Breweries and Adani Enterprises. On the other hand, the top losers were Indiabulls Housing Finance, Dewan Housing Finance Corporation and L&T Finance Holdings. 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 3.50% and reached 17.98. The 50-share Nifty was down by 131.70 points or 1.24% to settle at 10,453.05.

Nifty October 2018 futures closed at 10443.95 on Wednesday, at a discount of 9.10 points over spot closing of 10453.05, while Nifty November 2018 futures ended at 10495.05, at a premium of 42.00 points over spot closing. Nifty October futures saw a contraction of 0.31 million (mn) units, taking the total outstanding open interest (OI) to 20.31 mn units. The near month derivatives contract will expire on October 25, 2018.

From the most active contracts, Indiabulls Housing Finance October 2018 futures traded at a premium of 0.65 points at 778.55 compared with spot closing of 777.90. The numbers of contracts traded were 54,548.

Yes Bank October 2018 futures traded at a discount of 0.85 points at 232.15 compared with spot closing of 233.00. The numbers of contracts traded were 31,471.

Infosys October 2018 futures traded at a discount of 5.45 points at 700.05 compared with spot closing of 705.50. The numbers of contracts traded were 30,299.

Reliance Industries October 2018 futures traded at a discount of 0.50 points at 1150.50 compared with spot closing of 1151.00. The numbers of contracts traded were 29,602.

Bajaj Finance October 2018 futures traded at a discount of 0.50 points at 2147.50 compared with spot closing of 2148.00. The numbers of contracts traded were 29,376.

Among Nifty calls, 10700 SP from the October month expiry was the most active call with an addition of 0.82 million open interests. Among Nifty puts, 10,400 SP from the October month expiry was the most active put with a contraction of 0.34 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (5.78mn) and that for Puts was at 10,000 SP (3.15mn). The respective Support and Resistance levels of Nifty are: Resistance 10,629.98 ---- Pivot Point 10,533.22 --- Support --- 10,356.28.

The Nifty Put Call Ratio (PCR) finally stood at 0.85 for October month contract. The top five scrips with highest PCR on OI were Page Industries (4.00), Bosch (2.00), Berger Paints India (1.43), Equitas Holdings (1.41) and Cholamandalam Investment (1.20).

Among most active underlying, Reliance Industries witnessed a contraction of 1.87 million units of Open Interest in the October month futures contract, followed by Infosys witnessing a contraction of 0.56 million units of Open Interest in the October month contract, Bajaj Finance witnessed an addition of 0.51 million units of Open Interest in the October month contract, State Bank of India witnessed a contraction of 4.28 million units of Open Interest in the October month contract and ICICI Bank witnessed a contraction of 6.88 million units of Open Interest in the October month future contract.