Nifty closes lower tracking global rout; cracks below 10,150

Local equity benchmark -- Nifty -- erased all its previous day’s gain, as market suffered a strong sell-off on Thursday, following weak global cues and fresh weakness in the rupee. The index made a pessimistic start, as traders were cautious with private report stating that Indian financial markets’ liquidity position has worsened with cash deficit widening to about Rs 1.4 lakh crore this week compared with a small surplus in first week of October. Traders also remained concerned with a private report that the latest government data shows that during the first six months of the financial year, trade deficit in oil already touched $46.6 billion, up 67% from 27.9 billion during the same period in 2017-18.

Index maintained its weak momentum in the noon session and ended below the psychological 10,150 level, as participants were on the sidelines with a report that Income Tax Department (ITD) launched multiple raids at over 100 locations in Tamil Nadu and Andhra Pradesh as part of a tax evasion probe against mining and mineral export companies. Traders shrugged off private report that corporate India’s business optimism for the October-December quarter improved marginally on expectations of higher festive season demand, implementation of the 7th Pay Commission awards and increase in minimum support price (MSP) of Kharif crops. Traders also overlooked Economic Affairs Secretary Subhash Chandra Garg’s statement that the non-banking financial companies' (NBFCs) liquidity, rupee fall are temporary problems.

All the sectoral indices ended in red on the NSE except IT. The top gainers from the F&O segment were InterGlobe Aviation, Kajaria Ceramics and Oriental Bank of Commerce. On the other hand, the top losers were Dish TV India, Infibeam Avenues and Multi Commodity Exchange of 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 0.44% and reached 18.96. The 50-share Nifty was down by 99.85 points or 0.98% to settle at 10,124.90.

Nifty November 2018 futures closed at 10174.55 on Thursday, at a premium of 49.65 points over spot closing of 10124.90, while Nifty December 2018 futures ended at 10219.80, at a premium of 94.90 points over spot closing. Nifty November futures saw an addition of 4.70 million (mn) units, taking the total outstanding open interest (OI) to 21.38 mn units. The near month derivatives contract will expire on November 29, 2018.

From the most active contracts, Maruti Suzuki India November 2018 futures traded at a premium of 41.05 points at 6766.05 compared with spot closing of 6725.00. The numbers of contracts traded were 48,830.

Yes Bank November 2018 futures traded at a premium of 0.85 points at 199.80 compared with spot closing of 198.95. The numbers of contracts traded were 42,136.

Reliance Industries November 2018 futures traded at a discount of 0.80 points at 1037.00 compared with spot closing of 1037.80. The numbers of contracts traded were 30,172.

ICICI Bank November 2018 futures traded at a premium of 0.35 points at 319.80 compared with spot closing of 319.45. The numbers of contracts traded were 24,062.

Tata Motor November 2018 futures traded at a premium of 0.40 points at 166.50 compared with spot closing of 166.10. The numbers of contracts traded were 23,246.

Among Nifty calls, 10200 SP from the November month expiry was the most active call with an addition of 0.51 million open interests. Among Nifty puts, 10,100 SP from the November month expiry was the most active put with an addition of 0.32 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (1.99mn) and that for Puts was at 10,000 SP (3.07mn). The respective Support and Resistance levels of Nifty are: Resistance 10,167.90 ---- Pivot Point 10,123.60 --- Support --- 10,080.60.

The Nifty Put Call Ratio (PCR) finally stood at 1.35 for November month contract. The top five scrips with highest PCR on OI were Godrej Consumer Products (3.50), SREI Infrastructure Finance (3.41), Capital First (3.09), Raymond (3.00) and SRF (2.98).

Among most active underlying, Reliance Industries witnessed an addition of 12.49 million units of Open Interest in the November month futures contract, followed by Maruti Suzuki India witnessing an addition of 1.01 million units of Open Interest in the November month contract, Bajaj Finance witnessed an addition of 1.13 million units of Open Interest in the November month contract, Yes Bank witnessed an addition of 23.57 million units of Open Interest in the November month contract and ICICI Bank witnessed an addition of 15.64 million units of Open Interest in the November month future contract.