Nifty ends with notable losses amid geo-political concerns

Key equity benchmark -- Nifty -- ended lower on Tuesday amid rising geo-political concerns. The day began on a pessimistic note, as traders remained anxious with a report that the flow of foreign direct investment (FDI) into India is dropping and may suffer its first full-year decline since Prime Minister Narendra Modi came to power in 2014. Inbound FDI dropped 7% to $33.5 billion in the nine months between April and December 2018, compared with $36 billion in the year-earlier period. Selling further crept in and the market traded near intraday low level in morning session, as investors were cautious with Bibek Debroy, the head of Prime Minister’s economic advisory panel, statement that India lacks good data on economy and jobs as it is majorly an informal economy.

In the afternoon deals, market managed to come out off its intraday low points, as traders took some solace with SBI Research’s report saying that the economy is likely to grow at 6.6-6.7% in the third quarter and 7.2% for the full financial year. The yearly SBI composite index for February saw a marginally rise to 50.60 (a score of under 50 indicates negative growth). The recovery was not enough to bring markets back in green, as some concerns remained among the investors with domestic ratings agency ICRA’s report that India Inc. witnessed a dip in both revenue growth as well as margins in the December quarter compared to the preceding three months. The analysis is based on the aggregate numbers reported by 648 listed companies, which shows a revenue growth of 17.3% in Q3 down from 19.4% in the preceding three months.

Traders were seen piling up positions in Media, Auto and Pharma stocks, while selling was witnessed in Realty, PSU Bank and Fin Services. The top gainers from the F&O segment were Adani Power, Reliance Communications and Zee Entertainment Enterprises. On the other hand, the top losers were Dewan Housing Finance Corporation, Suzlon Energy and Max Financial Services. In the index option segment, maximum OI continues to be seen in the 10,800-11,200 calls and 10,300 -10,500 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 11.44% and reached 17.11. The 50-share Nifty was down by 44.80 points 0.41% to settle at 10,835.30.

Nifty February 2019 futures closed at 10827.80 on Tuesday, at a discount of 7.50 points over spot closing of 10835.30, while Nifty March 2019 futures ended at 10868.90, at a premium of 33.60 points over spot closing.  Nifty February futures saw a contraction of 3.55 million (mn) units, taking the total outstanding open interest (OI) to 14.49 mn units. The near month derivatives contract will expire on February 28, 2019.

From the most active contracts, Yes Bank February 2019 futures traded at a discount of 0.35 points at 230.20 compared with spot closing of 230.55. The numbers of contracts traded were 56,591.

Reliance Industries February 2019 futures traded at a premium of 1.05 points at 1221.25 compared with spot closing of 1220.20. The numbers of contracts traded were 42,818.

Tata Consultancy Services February 2019 futures traded at a premium of 1.60 points at 2034.10 compared with spot closing of 2032.50. The numbers of contracts traded were 30,263.

HDFC Bank February 2019 futures traded at a premium of 0.00 points at 2109.00 compared with spot closing of 2109.00. The numbers of contracts traded were 26,871.

Zee Entertainment Enterprises February 2019 futures traded at a discount of 2.25 points at 469.65 compared with spot closing of 471.90. The numbers of contracts traded were 26,807.

Among Nifty calls, 10,900 SP from the February month expiry was the most active call with an addition of 0.23 million open interests. Among Nifty puts, 10,800 SP from the February month expiry was the most active put with a contraction of 0.82 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.31mn) and that for Puts was at 10,400 SP (2.92mn). The respective Support and Resistance levels of Nifty are: Resistance 10,906.27 ---- Pivot Point 10,817.78 --- Support --- 10,746.82.

The Nifty Put Call Ratio (PCR) finally stood at 1.07 for February month contract. The top five scrips with highest PCR on OI were GMR Infrastructure (2.15), Cipla (1.54), Birlasoft (1.43), Wipro (1.40) and Tata Consultancy Services (1.39).

Among most active underlying, Reliance Industries witnessed a contraction of 8.24 million units of Open Interest in the February month futures contract, followed by Yes Bank witnessing a contraction of 15.12 million units of Open Interest in the February month contract, Tata Consultancy Services witnessed a contraction of 2.70 million units of Open Interest in the February month contract, ICICI Bank witnessed a contraction of 16.82 million units of Open Interest in the February month contract and Axis Bank witnessed a contraction of 9.10 million units of Open Interest in the February month future contract.