Nifty ends in red; Auto, Bank stocks drag

Key equity benchmark -- Nifty -- ended first day of the trading week in negative trajectory led by the intense selling in Auto and Bank stocks. Nifty slips below its crucial 10,500 level. The index made a positive start, as investors took some support with RBI data showing that bank credit rose by a healthy 14.41 percent during the fortnight to October 26 despite the overall increase in lending rates, for first time in over five years. Market soon erased gains and entered into negative zone in the early noon session, as traders turned cautions with former RBI governor Raghuram Rajan’s statement that demonetisation and the Goods and Services Tax (GST) are the two major headwinds that held back India’s economic growth last year, asserting that the current 7% growth rate is not enough to meet the country’s needs.

Index extended its losses in last hour to end the session on a lower note, as sentiments remained dampened with a report stating that exports of over half of the 30 sectors closely monitored by the Commerce Ministry were in the negative zone in September. Overall exports in September were contracted by 2.15% to $27.95 billion mainly due to the base impact. Adding to pessimism, a private report stated that corporate earnings have failed to keep pace with the trajectory of nominal gross domestic product (GDP) over the past 10 years. The combined net profit of listed companies has grown at a compound annual growth rate (CAGR) of 4.1 per cent, against 12.9 per cent growth in India’s GDP at nominal prices during the period.

All the sectoral indices ended in red on the NSE except IT. The top gainers from the F&O segment were Wockhardt, Titan Company and Dewan Housing Finance Corporation. On the other hand, the top losers were Oriental Bank of Commerce, Hindustan Petroleum Corporation and The India Cements. In the index option segment, maximum OI continues to be seen in the 10,700-11,100 calls and 9800 -10,200 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 9.02% and reached 19.36. The 50-share Nifty was down by 103.00 points or 0.97% to settle at 10,482.20.

Nifty November 2018 futures closed at 10503.85 on Monday, at a premium of 21.65 points over spot closing of 10482.20, while Nifty December 2018 futures ended at 10549.90, at a premium of 67.70 points over spot closing.  Nifty November futures saw an addition of 0.54 million (mn) units, taking the total outstanding open interest (OI) to 24.25 mn units. The near month derivatives contract will expire on November 29, 2018.

From the most active contracts, Titan Company November 2018 futures traded at a discount of 3.00 points at 895.40 compared with spot closing of 898.40. The numbers of contracts traded were 35,745.

Tata Steel November 2018 futures traded at a premium of 1.90 points at 585.15 compared with spot closing of 583.25. The numbers of contracts traded were 24,602.

Reliance Industries November 2018 futures traded at a premium of 3.65 points at 1079.65 compared with spot closing of 1076.00. The numbers of contracts traded were 22,210.

HDFC Bank November 2018 futures traded at a premium of 8.75 points at 1929.60 compared with spot closing of 1920.85. The numbers of contracts traded were 20,080.

Yes Bank November 2018 futures traded at a premium of 0.90 points at 223.30 compared with spot closing of 222.40. The numbers of contracts traded were 18,967.

Among Nifty calls, 10700 SP from the November month expiry was the most active call with an addition of 0.51 million open interests. Among Nifty puts, 10,500 SP from the November month expiry was the most active put with a contraction of 0.13 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (3.42mn) and that for Puts was at 10,000 SP (4.81mn). The respective Support and Resistance levels of Nifty are: Resistance 10,597.12 ---- Pivot Point 10,530.58 --- Support --- 10,415.67.

The Nifty Put Call Ratio (PCR) finally stood at 1.37 for November month contract. The top five scrips with highest PCR on OI were Adani Power (1.97), UPL (1.48), Asian Paint (1.33), DLF (1.29) and PC Jeweller (1.20).

Among most active underlying, Titan Company witnessed a contraction of 0.14 million units of Open Interest in the November month futures contract, followed by Reliance Industries witnessing a contraction of 0.02 million units of Open Interest in the November month contract, Tata Steel witnessed an addition of 3.60 million units of Open Interest in the November month contract, State Bank of India witnessed a contraction of 0.27 million units of Open Interest in the November month contract and Maruti Suzuki India witnessed a contraction of 0.03 million units of Open Interest in the November month future contract.