Nifty ends slightly in red on Wednesday

Key equity benchmark -- Nifty -- ended the volatile day of trade with marginal losses on Wednesday, snapping seven-day rally. Index made a cautions start but soon gained momentum to trade in green for most part of the day, as investors took some support with Reserve Bank of India (RBI) governor Shakthikanta Das’ statement that the market response to the unconventional liquidity tool of dollar swap auction worth $5 billion has been received quite well. Some comfort also came after the Vice President of India, M. Venkaiah Naidu expressed the hope that ‘in all our countries, we would be able to translate economic growth into inclusive, sustainable development’ and referred to Indian government’s resolve to transform governance and ultimately the lives of the people.

Market lost its early momentum and slipped into the negative terrain in afternoon session as traders turned cautious with a report that Indian mutual funds and insurance firms, which scooped up shares while foreign institutional investors (FIIs) stayed away, turned net sellers of Rs 10,247.9 crore in March, even as FIIs returned to Indian markets. Adding some woes, economists raised concerns over a sharp slowdown in the Indian economy and pitched for a monetary policy boost to support growth at a meeting with the RBI chief on March 19. Traders remain concerned with a report that there is a 70% chance of El Nino climate cycle forming towards the second half of this year, a forecast that does not augur well for the monsoon season in India.

Traders were seen piling up positions in Realty, IT and PSU Bank, while selling was witnessed in Media, Auto and Metals. The top gainers from the F&O segment were InterGlobe Aviation, Indiabulls Housing Finance and Vodafone Idea. On the other hand, the top losers were Hindustan Petroleum Corporation, Zee Entertainment Enterprises and Bharat Petroleum Corporation. In the index option segment, maximum OI continues to be seen in the 11,300-11,700 calls and 10,800 -11,200 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 2.79% and reached 16.03. The 50-share Nifty was down by 11.35 points 0.10% to settle at 11,521.05.

Nifty March 2019 futures closed at 11553.20 on Wednesday, at a premium of 32.15 points over spot closing of 11521.05, while Nifty April 2019 futures ended at 11611.30, at a premium of 90.25 points over spot closing. Nifty March futures saw a contraction of 0.79 million (mn) units, taking the total outstanding open interest (OI) to 20.55 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 7.10 points at 1380.15 compared with spot closing of 1373.05. The numbers of contracts traded were 37,693.

Yes Bank March 2019 futures traded at a premium of 0.70 points at 253.25 compared with spot closing of 252.55. The numbers of contracts traded were 30,363.

Indiabulls Housing Finance March 2019 futures traded at a premium of 2.00 points at 735.50 compared with spot closing of 733.50. The numbers of contracts traded were 26,263.

Vodafone Idea March 2019 futures traded at a discount of 1.30 points at 32.00 compared with spot closing of 33.30. The numbers of contracts traded were 24,394.

Infosys March 2019 futures traded at a premium of 2.65 points at 740.45 compared with spot closing of 737.80. The numbers of contracts traded were 19,590.

Among Nifty calls, 11,550 SP from the March month expiry was the most active call with an addition of 0.24 million open interests. Among Nifty puts, 11,500 from the March month expiry was the most active put with an addition of 0.55 million open interests. The maximum OI outstanding for Calls was at 11,500 SP (2.69mn) and that for Puts was at 11,000 SP (4.26mn). The respective Support and Resistance levels of Nifty are: Resistance 11,550.40 ---- Pivot Point 11,526.75 --- Support --- 11,497.40.

The Nifty Put Call Ratio (PCR) finally stood at 1.60 for March month contract. The top five scrips with highest PCR on OI were Oracle Financial Services Software (2.00), Bajaj Finserv (1.89), UPL (1.53) Larsen & Toubro (1.36) and Cholamandalam Investment and Fin (1.32).

Among most active underlying, Reliance Industries witnessed a contraction of 3.10 million units of Open Interest in the March month futures contract, followed by Infosys witnessing a contraction of 6.20 million units of Open Interest in the March month contract, State Bank of India witnessed a contraction of 4.37 million units of Open Interest in the March month contract, Maruti Suzuki India witnessed an addition of 0.02 million units of Open Interest in the March month contract and Yes Bank witnessed a contraction of 19.87 million units of Open Interest in the March month future contract.