Nifty ends on lower note; gives up 10,250 level

Last hour selling forced local equity benchmark -- Nifty -- to end the Monday’s trading session on a lower note, weighed down by IndusInd Bank and Reliance Industries. The Nifty barometer ended the session below 10,250 mark. The index made a positive start, taking support from a private report stating that India is likely to emerge as the third-largest economy in the world in just over a decade from now, surpassing Japan and Germany. Some optimism also came with a report that in an effort to ease current liquidity crunch, the RBI allowed banks to use government securities equivalent to their incremental credit to non-banking lenders for a three-month period starting October 20 to meet their liquidity coverage ratio (LCR) needs.

However, bulls gave up in the last hour, with Nifty entering into negative terrain and finally ended with a cut of over half a percent. Traders turned cautious with the Reserve Bank of India’s (RBI) report showing that India’s forex reserves declined by $5.14 billion during the week ended October 12, when the rupee slipped to 74 and beyond against the US dollar. The RBI’s weekly statistical supplement showed that overall forex reserves decreased to $394.46 billion from $399.60 billion reported for the week ended October 5. Besides, a report also stated that job creation slowed down by 8.39 percent to stand at 8,94,769 in August month as against the revised figure of 9,76,675 in July month.

All the sectoral indices ended in red on the NSE except Fin Service and Auto. The top gainers from the F&O segment were Indiabulls Housing Finance, Muthoot Finance and Repco Home Finance. On the other hand, the top losers were Infibeam Avenues, Dewan Housing Finance Corporation and Dish TV India. 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 7.93% and reached 21.35. The 50-share Nifty was down by 58.30 points or 0.57% to settle at 10,245.25.

Nifty October 2018 futures closed at 10231.95 on Monday, at a discount of 13.30 points over spot closing of 10245.25, while Nifty November 2018 futures ended at 10281.25, at a premium of 36.00 points over spot closing. Nifty October futures saw a contraction of 2.38 million (mn) units, taking the total outstanding open interest (OI) to 17.15 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 discount of 9.95 points at 702.25 compared with spot closing of 712.20. The numbers of contracts traded were 61,233.

IndusInd Bank October 2018 futures traded at a discount of 12.20 points at 1454.80 compared with spot closing of 1467.00. The numbers of contracts traded were 40,439.

Reliance Industries October 2018 futures traded at a discount of 0.60 points at 1062.60 compared with spot closing of 1063.20. The numbers of contracts traded were 36,791.

Yes Bank October 2018 futures traded at a discount of 1.35 points at 211.75 compared with spot closing of 213.10. The numbers of contracts traded were 33,657.

ICICI Bank October 2018 futures traded at a discount of 2.45 points at 325.75 compared with spot closing of 328.20. The numbers of contracts traded were 30,865.

Among Nifty calls, 10500 SP from the October month expiry was the most active call with an addition of 0.32 million open interests. Among Nifty puts, 10,300 SP from the October month expiry was the most active put with an addition of 0.33 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.43mn) and that for Puts was at 10,000 SP (3.68mn). The respective Support and Resistance levels of Nifty are: Resistance 10,361.20 ---- Pivot Point 10,292.60 --- Support --- 10,176.65.

The Nifty Put Call Ratio (PCR) finally stood at 0.80 for October month contract. The top five scrips with highest PCR on OI were Page Industries (4.00), Bosch (2.00), Berger Paints India (1.41), Equitas Holdings (1.36) and Oil India (1.29).

Among most active underlying, Reliance Industries witnessed a contraction of 8.25 million units of Open Interest in the October month futures contract, followed by ICICI Bank witnessing a contraction of 14.48 million units of Open Interest in the October month contract, HDFC Bank witnessed a contraction of 1.17 million units of Open Interest in the October month contract, Bajaj Finance witnessed a contraction of 2.18 million units of Open Interest in the October month contract and Indiabulls Housing Finance witnessed a contraction of 4.31 million units of Open Interest in the October month future contract.