Nifty ends lower for eighth straight session; tumbles 0.34%

After spending most of the day in green zone, key equity benchmark --Nifty--closed the trading session 0.34% lower on Tuesday, extending its fall for eighth consecutive day. An index made a slightly negative start but soon gained momentum, as traders remained optimistic with the Reserve Bank of India (RBI) in its board meeting on February 18 deciding to transfer Rs 28,000 crore as interim dividend to the government for the period of July to December 2018. The interim surplus has been decided after a limited audit review and after applying the Economic Capital Framework. Sentiments were also buoyed, as RBI said it would inject Rs 12,500 crore into the system through purchase of government securities on February 21 to increase liquidity. The purchase will be made through open market operations (OMOs).

The barometer erased all of its gain to turn negative in the last leg of the session, as investors turned pessimistic with S&P Global Ratings stating that rated Indian corporates are likely to see slowdown in revenue growth over the next 12-24 months. It also said that India's central government elections this year may pose additional risks for Indian corporates. A change of administration may trigger expansionary government spending that pushes up borrowing costs or raises inflation. Investors took a note of Finance Minister Arun Jaitley’s statement that India needs fewer and mega banks which are strong because in every sense, from borrowing rates to optimum utilisation, the economies of scale as far as banking sector is concerned are of great help.

All sectoral indices ended in green on NSE except IT and Pharma. The top gainers from the F&O segment were GMR Infrastructure, National Aluminium Company and REC. On the other hand, the top losers were Kaveri Seed Company, Reliance Power and Wipro. In the index option segment, maximum OI continues to be seen in the 10,800-11,200 calls and 10,200 -10,600 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 2.60% and reached 18.47. The 50-share Nifty was down by 36.60 points 0.34% to settle at 10,604.35.

Nifty February 2019 futures closed at 10617.15 on Tuesday, at a premium of 12.80 points over spot closing of 10604.35, while Nifty March 2019 futures ended at 10656.30, at a premium of 51.95 points over spot closing. Nifty February futures saw an addition of 0.11 million (mn) units, taking the total outstanding open interest (OI) to 22.00 mn units. The near month derivatives contract will expire on February 28, 2019.

From the most active contracts, Reliance Industries February 2019 futures traded at a premium of 3.40 points at 1219.00 compared with spot closing of 1215.60. The numbers of contracts traded were 27,220.

TCS February 2019 futures traded at a premium of 2.55 points at 1910.15 compared with spot closing of 1907.60. The numbers of contracts traded were 21,610.

Yes Bank February 2019 futures traded at a discount of 0.40 points at 213.10 compared with spot closing of 213.50. The numbers of contracts traded were 19,605.

ICICI Bank February 2019 futures traded at a premium of 1.20 points at 343.90 compared with spot closing of 342.70. The numbers of contracts traded were 16,620.

State Bank of India February 2019 futures traded at a premium of 0.70 points at 263.45 compared with spot closing of 262.75. The numbers of contracts traded were 15,239.

Among Nifty calls, 10,700 SP from the February month expiry was the most active call with an addition of 0.22 million open interests. Among Nifty puts, 10,600 SP from the February month expiry was the most active put with an addition of 0.06 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.15mn) and that for Puts was at 10,400 SP (3.11mn). The respective Support and Resistance levels of Nifty are: Resistance 10,689.58 ---- Pivot Point 10,637.62 --- Support --- 10,552.38.

The Nifty Put Call Ratio (PCR) finally stood at 0.92 for February month contract. The top five scrips with highest PCR on OI were Shree Cements (2.50), Cipla (1.80), GMR Infrastructure (1.61), KPIT Technologies (1.57), and Ramco Cements (1.25).

Among most active underlying, Reliance Industries witnessed a contraction of 0.89 million units of Open Interest in the February month futures contract, followed by ICICI Bank witnessing a contraction of 0.37 million units of Open Interest in the February month contract, State Bank of India witnessed a contraction of 2.62 million units of Open Interest in the February month contract, TCS witnessed a contraction of 0.02 million units of Open Interest in the February month contract and Axis Bank witnessed a contraction of 0.20 million units of Open Interest in the February month future contract.