Bears take control over market; Nifty plunges 0.90%

NSE gauge -- Nifty50 -- witnessed considerable losses on Monday, sliding below its crucial psychological support at 11,400 levels during the day, taking cues from a broader sell-off seen across the globe on fears of a recession in the US. Market made a gap-down opening, as sentiments remained pessimistic ahead of the fiscal deficit and infrastructure output data for the month of February are slated for a release later in the week. Traders ignored the Reserve Bank of India’s (RBI) report showing that India’s foreign exchange reserves surged by a whopping $3.602 billion to $405.638 billion in the week to March 15, driven by rise in foreign currency assets. Traders shrugged off the Employees’ Provident Fund Organisation (EPFO) data showing that net employment generation in the formal sector touched a 17-month high of 8.96 lakh in January. The addition in January was 131% higher as compared with 3.87 lakh EPFO subscribers added in the year-ago month.

Market continued southward momentum in the afternoon deals, as sentiments continued to hit, with a private report stating that India's industrial production is expected to stay muted in the near term, owing to weak exports, rural distress, credit constraints and uncertainty over the election outcome. According to the report, the Index of Industrial Production (IIP) is likely to have grown by 3-3.2 per cent during February 2019. Adding to the pessimism, Vice President of India M. Venkaiah Naidu called for a renewed focus on rural health care and cautioned that the quality of healthcare being delivered cannot be determined by the price being paid.

All sectoral indices ended in red on NSE. The top gainers from the F&O segment were Jet Airways, REC and Power Finance Corporation. On the other hand, the top losers were Vodafone Idea, Dish TV India and Cummins India. In the index option segment, maximum OI continues to be seen in the 11,400-11,800 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 increased by 2.44% and reached 16.67. The 50-share Nifty was down by 102.65 points 0.90% to settle at 11,354.25.

Nifty March 2019 futures closed at 11370.05 on Monday, at a premium of 15.80 points over spot closing of 11354.25, while Nifty April 2019 futures ended at 11436.85, at a premium of 82.60 points over spot closing. Nifty March futures saw a contraction of 3.02 million (mn) units, taking the total outstanding open interest (OI) to 15.45 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 discount of 0.05 points at 1327.95 compared with spot closing of 1328.00. The numbers of contracts traded were 39,184.

HDFC Bank March 2019 futures traded at a premium of 1.65 points at 2279.65 compared with spot closing of 2278.00. The numbers of contracts traded were 23,725.

Yes Bank March 2019 futures traded at a premium of 0.65 points at 248.05 compared with spot closing of 247.40. The numbers of contracts traded were 23,128.

Tata Consultancy Services March 2019 futures traded at a premium of 7.55 points at 1988.35 compared with spot closing of 1980.80. The numbers of contracts traded were 21,397.

Maruti Suzuki March 2019 futures traded at a premium of 19.90 points at 6539.90 compared with spot closing of 6520.00. The numbers of contracts traded were 21,372.

Among Nifty calls, 11,500 SP from the March month expiry was the most active call with an addition of 0.60 million open interests. Among Nifty puts, 11,300 from the March month expiry was the most active put with an addition of 0.34 million open interests. The maximum OI outstanding for Calls was at 11,600 SP (3.54mn) and that for Puts was at 11,000 SP (3.50mn). The respective Support and Resistance levels of Nifty are: Resistance 11,396.07 ---- Pivot Point 11,353.83 --- Support --- 11,312.02.

The Nifty Put Call Ratio (PCR) finally stood at 1.27 for March month contract. The top five scrips with highest PCR on OI were Oracle Financial Services Software (2.00), UPL (1.51), Bajaj Finserv (1.35), Cholamandalam Investment and Fin (1.29) and Larsen & Toubro (1.28).

Among most active underlying, Reliance Industries witnessed a contraction of 8.13 million units of Open Interest in the March month futures contract, followed by Maruti Suzuki India witnessing a contraction of 0.42 million units of Open Interest in the March month contract, State Bank of India witnessed a contraction of 11.02 million units of Open Interest in the March month contract, ICICI Bank witnessed a contraction of 9.59 million units of Open Interest in the March month contract and REC witnessed an addition of 1.84 million units of Open Interest in the March month future contract.