Nifty ends slightly lower; slides below 10,600

Following weakness in the global markets, local equity benchmark -- Nifty -- ended first full trading session of Samvat 2075 on slightly lower note. The barometer breached 10,600 level dragged by selling in IT, Metal and Realty stocks. The index made a negative start, as traders remained pessimistic with Moody’s Investors Service’s statement that Indian economy will expand 7.4% in 2018, but the growth will slow down to 7.3% in the next year as domestic demand tapers on higher borrowing cost due to rising interest rates. Some cautiousness also came with a private report stating that unemployment rate in the country rose to 6.9% in October - the highest in two years. The estimated number of people employed during October 2018 was 397 million. This was 2.4% lower than the rate in October 2017.

However, Nifty recovered from the losses in the early noon session and started trading in green, as market participants took some encouragement from Finance Minister Arun Jaitley’s statement that demonetisation helped in tackling black money and expanding the tax base. Some optimism also came with a report stating that demonetisation was a fundamental corrective without which the Indian economy would have collapsed by now just like subprime crisis in the US. But, market could not hold the positive momentum and it turned negative again in the afternoon session, as investors remained concerned with a private report stating that slowdown in Non-Banking Financial Companies (NBFC) disbursements could have a negative impact on growth. It also said if this situation persists there will be a negative impact on growth because credit availability is going to be that much reduced for the aggregate economy.

Traders were seen piling up positions in Auto, Media and Pharma stocks, while selling was witnessed in Metal, IT and PSU Bank. The top gainers from the F&O segment were Infibeam Avenues, Strides Pharma Science and PC Jeweller. On the other hand, the top losers were Indian Bank, Ashok Leyland and Bharti Airtel. In the index option segment, maximum OI continues to be seen in the 10,700-11,100 calls and 10,000 -10,400 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 0.63% and reached 17.76. The 50-share Nifty was down by 13.20 points or 0.12% to settle at 10,585.20.

Nifty November 2018 futures closed at 10623.75 on Friday, at a premium of 38.55 points over spot closing of 10585.20, while Nifty December 2018 futures ended at 10671.80, at a premium of 86.60 points over spot closing. Nifty November futures saw a contraction of 0.09 million (mn) units, taking the total outstanding open interest (OI) to 23.71 mn units. The near month derivatives contract will expire on November 29, 2018.

From the most active contracts, Reliance Industries November 2018 futures traded at a premium of 5.35 points at 1098.35 compared with spot closing of 1093.00. The numbers of contracts traded were 25,863.

PC Jeweller November 2018 futures traded at a premium of 0.45 points at 92.35 compared with spot closing of 91.90. The numbers of contracts traded were 25,382.

Yes Bank November 2018 futures traded at a premium of 0.85 points at 228.40 compared with spot closing of 227.55. The numbers of contracts traded were 25,229.

Axis Bank November 2018 futures traded at a premium of 2.05 points at 613.75 compared with spot closing of 611.70. The numbers of contracts traded were 19,005.

Maruti Suzuki November 2018 futures traded at a premium of 12.45 points at 7288.90 compared with spot closing of 7276.45. The numbers of contracts traded were 17,950. Among Nifty calls, 10700 SP from the November month expiry was the most active call with an addition of 0.20 million open interests. Among Nifty puts, 10,500 SP from the November month expiry was the most active put with an addition of 0.12 million open interests.

The maximum OI outstanding for Calls was at 11,000 SP (2.98mn) and that for Puts was at 10,200 SP (3.24mn). The respective Support and Resistance levels of Nifty are: Resistance 10,621.55 ---- Pivot Point 10,583.20 --- Support --- 10,546.85.

The Nifty Put Call Ratio (PCR) finally stood at 1.53 for November month contract. The top five scrips with highest PCR on OI were Adani Power (2.37), UPL (1.46), Asian Paint (1.45), DLF (1.39) and PC Jeweller (1.28).

Among most active underlying, Reliance Industries witnessed a contraction of 0.38 million units of Open Interest in the November month futures contract, followed by Maruti Suzuki witnessing a contraction of 0.13 million units of Open Interest in the November month contract, State Bank of India witnessed a contraction of 1.27 million units of Open Interest in the November month contract, Axis Bank witnessed a contraction of 0.07 million units of Open Interest in the November month contract and Yes Bank witnessed a contraction of 1.16 million units of Open Interest in the November month future contract.