Nifty ends on slightly lower note

Key equity benchmark -- Nifty -- ended Wednesday’s trading session on a slightly lower note due to selling in heavyweights such as Sun Pharma and Tech Mahindra. The barometer made a positive start as traders took encouragement from Securities and Exchange Board of India (SEBI) tightening disclosure and review norms for credit rating agencies (CRAs). SEBI ordered CRAs to analyse deterioration in the liquidity conditions of an issuer, while monitoring its repayment schedules and taking into account any asset-liability mismatches. Market soon started trading in negative terrain, despite report stating that based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the RBI has decided to conduct purchase of the following government securities under Open Market Operations for an aggregate amount of Rs 120 billion on November 15, 2018.

Index pared its losses and again started trading in green trajectory, as investors took some support with Prime Minister Narendra Modi stating that financial inclusion has become a reality for 1.3 billion Indians as he pitched India as a favourite investment destination at the Fintech Festival. However, market failed to hold the positive momentum and entered into negative trajectory as market participants took note of a data indicating that Inflation based on wholesale prices rose to over 4-month high of 5.28 percent in October on rising prices of crude, natural gas, fuel and power although food prices have softened.

Traders were seen piling up positions in PSU Bank, FMCG and Bank stocks, while selling was witnessed in IT, Pharma and Realty. The top gainers from the F&O segment were InterGlobe Aviation, Godrej Consumer Products and Equitas Holdings. On the other hand, the top losers were Ashok Leyland, Motherson Sumi Systems and Sun Pharmaceutical Industries. In the index option segment, maximum OI continues to be seen in the 10,700-11,100 calls and 9900 -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 0.70% and reached 18.82. The 50-share Nifty was down by 6.20 points or 0.06% to settle at 10,576.30.

Nifty November 2018 futures closed at 10605.00 on Wednesday, at a premium of 28.70 points over spot closing of 10576.30, while Nifty December 2018 futures ended at 10646.75, at a premium of 70.45 points over spot closing. Nifty November futures saw a contraction of 0.30 million (mn) units, taking the total outstanding open interest (OI) to 23.75 mn units. The near month derivatives contract will expire on November 29, 2018.

From the most active contracts, Tata Steel November 2018 futures traded at a premium of 6.15 points at 590.65 compared with spot closing of 584.50. The numbers of contracts traded were 43,764.

Reliance Industries November 2018 futures traded at a discount of 0.40 points at 1098.60 compared with spot closing of 1099.00. The numbers of contracts traded were 35,556.

Sun Pharmaceutical November 2018 futures traded at a premium of 1.50 points at 522.30 compared with spot closing of 520.80. The numbers of contracts traded were 35,414.

State Bank of India November 2018 futures traded at a premium of 1.60 points at 284.65 compared with spot closing of 283.05. The numbers of contracts traded were 30,186.

ICICI Bank November 2018 futures traded at a discount of 0.40 points at 365.90 compared with spot closing of 366.30. The numbers of contracts traded were 28,033

Among Nifty calls, 10700 SP from the November month expiry was the most active call with an addition of 0.07 million open interests. Among Nifty puts, 10,500 SP from the November month expiry was the most active put with an addition of 0.10 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (3.44mn) and that for Puts was at 10,000 SP (4.85mn). The respective Support and Resistance levels of Nifty are: Resistance 10,641.03 ---- Pivot Point 10,586.87 --- Support --- 10,522.13.

The Nifty Put Call Ratio (PCR) finally stood at 1.44 for November month contract. The top five scrips with highest PCR on OI were Adani Power (1.96), IDBI (1.79), Oil (1.39), UPL (1.38) and Asian Paint (1.39).

Among most active underlying, Tata Steel witnessed a contraction of 0.86 million units of Open Interest in the November month futures contract, followed by ICICI Bank witnessing a contraction of 3.58 million units of Open Interest in the November month contract, State Bank of India witnessed an addition of 10.94 million units of Open Interest in the November month contract, Reliance Industries witnessed a contraction of 1.05 million units of Open Interest in the November month contract and Sun Pharmaceutical Industries witnessed an addition of 5.02 million units of Open Interest in the November month future contract.