Nifty end lower for second straight day; gives up 10,800-mark

Reversing early gains, key equity benchmark -- Nifty -- witnessed a fall on last trading day of the week, despite positive global clues. Index made a slightly green start, as traders remained encouraged with report that the Goods and Services Tax (GST) Council approved a series of measures aimed at benefiting small businesses, such as a doubling of the exemption threshold to Rs 40 lakh and an increase in the turnover limit for service providers looking to avail of the low-compliance composition scheme. Market soon pared all of its gains and slipped into negative trajectory as traders turned pessimistic on a report that that India's fiscal deficit target has overshot by 15 per cent in the first eight months of FY 2018-19, largely due to a revenue shortfall rather than front-loading of expenditure.

Markets extended losses, as traders reacted negatively to a report that the unemployment rate rose to a four-year high in 2016-17, when the government demonetised old currency notes, at the same time as more people joined the labour force looking for jobs. According to the findings of the Labour Bureau, the unemployment rate stood at 3.9 per cent, compared to 3.7 per cent in 2015-16 and 3.4 per cent in 2013-14. However, market trimmed their losses in the last trading hours, as some solace came with Commerce Minister Suresh Prabhu’s statement that the government is considering providing transport subsidy to states for promoting agriculture exports. On credit issues being faced by exporters, he said, the financial services secretary would hold meeting with banks on the matter.

All the sectoral indices ended in red on the NSE except FMCG and FIN Service. The top gainers from the F&O segment were Jet Airways (India), Repco Home Finance and CESC. On the other hand, the top losers were InterGlobe Aviation, IndusInd Bank and SREI Infrastructure Finance. In the index option segment, maximum OI continues to be seen in the 10,800-11,200 calls and 10,300 -10,700 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 0.05% and reached 15.35. The 50-share Nifty was down by 26.65 points 0.25% to settle at 10,794.95.

Nifty January 2019 futures closed at 10827.60 on Friday, at a premium of 32.65 points over spot closing of 10794.95, while Nifty February 2019 futures ended at 10861.60, at a premium of 66.65 points over spot closing. Nifty January futures saw a contraction of 0.43 million (mn) units, taking the total outstanding open interest (OI) to 24.58 mn units. The near month derivatives contract will expire on January 31, 2019.

From the most active contracts, TCS January 2019 futures traded at a premium of 4.45 points at 1847.90 compared with spot closing of 1843.45. The numbers of contracts traded were 47,194.

Reliance Industries January 2019 futures traded at a premium of 5.40 points at 1100.90 compared with spot closing of 1095.50. The numbers of contracts traded were 29,688.

Yes Bank January 2019 futures traded at a premium of 1.45 points at 184.85 compared with spot closing of 183.40. The numbers of contracts traded were 21,301.

Tata Motors January 2019 futures traded at a premium of 1.40 points at 181.20 compared with spot closing of 179.80. The numbers of contracts traded were 17,865.

IndusInd Bank January 2019 futures traded at a premium of 12.15 points at 1524.00 compared with spot closing of 1511.85. The numbers of contracts traded were 16,883. 

Among Nifty calls, 11,000 SP from the January month expiry was the most active call with an addition of 0.60 million open interests. Among Nifty puts, 10,800 SP from the January month expiry was the most active put with an addition of 0.03 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.69mn) and that for Puts was at 10,500 SP (3.89mn). The respective Support and Resistance levels of Nifty are: Resistance 10,850.27 ---- Pivot Point 10,794.83 --- Support --- 10,739.52.

The Nifty Put Call Ratio (PCR) finally stood at 1.13 for January month contract. The top five scrips with highest PCR on OI were Ramco Cements (1.14), KPIT Technologies (1.12), Axis Bank (1.00), UPL (0.99) and Power Finance Corporation (0.95).

Among most active underlying, Tata Consultancy Services witnessed a contraction of 0.22 million units of Open Interest in the January month futures contract, followed by Reliance Industries witnessing an addition of 1.01 million units of Open Interest in the January month contract, Infosys witnessed a contraction of 0.30 million units of Open Interest in the January month contract, ICICI Bank witnessed a contraction of 0.36 million units of Open Interest in the January month contract and State Bank of India witnessed a contraction of 0.53 million units of Open Interest in the January month future contract.