Nifty finishes in red terrain for third straight day

NSE barometer -- Nifty 50 -- witnessed third day of losses in a row to end marginally lower on Thursday after investors squared-off their positions on February derivative contracts' expiry. The day began on a strong positive note, as traders remain energized with private report indicating that private equity (PE) investments in India witnessed a 36 per cent growth to $1,325 million despite fall in volume on account of increased follow-on investments last month as compared to a year ago. Sentiments remained upbeat with a report that inflation likely to remain under 4 percent till October, the Reserve Bank may cut rates to the tune of 75-100 basis points in the next financial year. The report also includes the 25 basis points reduction in the February policy. Headline CPI inflation is likely to remain below 4 per cent until October and averages at 3.8 percent in FY20.

Market turned volatile during noon deals and pared all of its initial gains to end the session lower, impacted by Fitch Ratings’ statement that government's $7 billion (around Rs 48,000 crore) fund infusion into public sector banks (PSBs) would not be sufficient to support significantly stronger lending growth. Some pessimism also spread among the investors with credit rating agency, India Ratings’ report that the Government has depended on the National Small Savings Fund (NSSF) in FY19, but such borrowing runs the risk of understating the fiscal deficit number. It further noted that the Government has borrowed an additional Rs 500 billion from the NSSF to take its total dependence on this route to Rs 1,420 billion or 22.4 percent of the budgeted fiscal deficit in FY19.

All sectoral indices ended in green on NSE except Auto, Bank and Financial Services. The top gainers from the F&O segment were Oil & Natural Gas Corporation, Jaiprakash Associates and Voltas. On the other hand, the top losers were Reliance Infrastructure, Tata Consultancy Services and Cummins India. In the index option segment, maximum OI continues to be seen in the 10,800-11,000 calls and 10,500 -10,700 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 3.28% and reached 18.27. The 50-share Nifty was down by 14.15 points 0.13% to settle at 10,792.50.

Nifty March 2019 futures closed at 10857.25 on Thursday, at a premium of 64.75 points over spot closing of 10792.50, while Nifty April 2019 futures ended at 10899.35, at a premium of 106.85 points over spot closing. Nifty March futures saw an addition of 3.64 million (mn) units, taking the total outstanding open interest (OI) to 14.26 mn units. The near month derivatives contract will expire on March 28, 2019.

From the most active contracts, Reliance Industries March 2019 futures traded at a premium of 7.80 points at 1239.80 compared with spot closing of 1232.00. The numbers of contracts traded were 37,617.

Tata Consultancy Services March 2019 futures traded at a premium of 14.10 points at 1997.60 compared with spot closing of 1983.50. The numbers of contracts traded were 29,231.

Yes Bank March 2019 futures traded at a premium of 0.65 points at 232.85 compared with spot closing of 232.20. The numbers of contracts traded were 27,704.

HDFC March 2019 futures traded at a premium of 7.20 points at 1849.00 compared with spot closing of 1841.80. The numbers of contracts traded were 26,859.

HDFC Bank March 2019 futures traded at a premium of 14.30 points at 2091.20 compared with spot closing of 2076.90. The numbers of contracts traded were 23,400.

Among Nifty calls, 10,900 SP from the March month expiry was the most active call with addition of 0.20 million open interests. Among Nifty puts, 10,800 SP from the March month expiry was the most active put with an addition of 0.38 million open interests. The maximum OI outstanding for Calls was at 10,900 SP (1.17mn) and that for Puts was at 10,600 SP (2.49mn). The respective Support and Resistance levels of Nifty are: Resistance 10,843.85 ---- Pivot Point 10,814.35 --- Support --- 10,763.00.

The Nifty Put Call Ratio (PCR) finally stood at 0.34 for March month contract. The top five scrips with highest PCR on OI were Adani Enterprises (4.00), Century Textile and Industries (2.85), Birlasoft (2.84), Tata Elxsi (2.65) and Dr.Reddy's Laboratories (2.18).

Among most active underlying, Reliance Industries witnessed an addition of 10.54 million units of Open Interest in the March month futures contract, followed by Tata Consultancy Services witnessing an addition of 2.21 million units of Open Interest in the March month contract, Yes Bank witnessed an addition of 17.65 million units of Open Interest in the March month contract, HDFC witnessed an addition of 10.73 million units of Open Interest in the March month contract and State Bank of India witnessed an addition of 15.48 million units of Open Interest in the March month future contract.