Sell off in second half of trade drags Nifty below 11,450 mark

Nifty settles the session below its psychological support levels of 11,450 as sentiments turned bearish in the afternoon deals. The day began on a positive note, as traders took some encouragement with report that the RBI has received a good response to its dollar swap window on March 26, establishing the instrument as a credible liquidity tool and paving the way for more such auctions in the coming months. Banks offered $16.31 billion for the proposed swaps of up to $5 billion. Some comfort also came with a private report indicated that although 2018 brought some cyclical challenges, India maintains top ranking in overall consumer sentiment, while Brazil has overtaken China to come second.

However, markets wiped out all its gain to enter into negative territory, as traders opted to book all of their gains after former RBI Governor Raghuram Rajan expressed doubts over Indian economy growing at 7% when not enough jobs were being created. He also said the current cloud over the GDP numbers must be cleared by appointing an impartial body to look at the data. Besides, a report stated that Congress President Rahul Gandhi's minimum income scheme, aiming to lift five crore families or 25 crore people out of poverty, reflects a commitment to social security, but financing it may be an uphill task.

Traders were seen piling up positions in PSU Bank, Media and PVT Bank, while selling was witnessed in Pharma, Auto and Realty. The top gainers from the F&O segment were ICICI Prudential Life Insurance, Yes Bank and IndusInd Bank. On the other hand, the top losers were Vodafone Idea, Dabur India and Reliance Power. 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 3.41% and reached 17.04. The 50-share Nifty was down by 38.20 points 0.33% to settle at 11,445.05.

Nifty March 2019 futures closed at 11458.10 on Wednesday, at a premium of 13.05 points over spot closing of 11445.05, while Nifty April 2019 futures ended at 11537.70, at a premium of 92.65 points over spot closing. Nifty March futures saw a contraction of 2.35 million (mn) units, taking the total outstanding open interest (OI) to 10.69 mn units. The near month derivatives contract will expire on March 28, 2019.

From the most active contracts, Yes Bank March 2019 futures traded at a premium of 0.05 points at 268.65 compared with spot closing of 268.60. The numbers of contracts traded were 55,987.

Reliance Industries March 2019 futures traded at a premium of 4.55 points at 1351.55 compared with spot closing of 1347.00. The numbers of contracts traded were 39,406.

State Bank of India March 2019 futures traded at a premium of 0.70 points at 308.70 compared with spot closing of 308.00. The numbers of contracts traded were 28,480.

HDFC Bank March 2019 futures traded at a discount of 0.40 points at 2300.60 compared with spot closing of 2301.00. The numbers of contracts traded were 27,403.

ICICI Bank March 2019 futures traded at a premium of 0.60 points at 393.10 compared with spot closing of 392.50. The numbers of contracts traded were 25,032.

Among Nifty calls, 11,500 SP from the March month expiry was the most active call with an addition of 0.40 million open interests. Among Nifty puts, 11,400 from the March month expiry was the most active put with a contraction of 0.74 million open interests. The maximum OI outstanding for Calls was at 11,600 SP (3.56mn) and that for Puts was at 11,000 SP (2.80mn). The respective Support and Resistance levels of Nifty are: Resistance 11,523.17 ---- Pivot Point 11,468.08 --- Support --- 11,389.97.

The Nifty Put Call Ratio (PCR) finally stood at 1.39 for March month contract. The top five scrips with highest PCR on OI were Oracle Financial Services Software (2.00), Cholamandalam Investment and Fin (1.16), Bharat Financial Inclusion (1.53), Mangalore Refinery and Petrochemicals (1.51) and Oriental Bank of Commerce (1.39).

Among most active underlying, Reliance Industries witnessed a contraction of 7.21 million units of Open Interest in the March month futures contract, followed by State Bank of India witnessing a contraction of 22.66 million units of Open Interest in the March month contract, Yes Bank witnessed a contraction of 19.32 million units of Open Interest in the March month contract, ICICI Bank witnessed a contraction of 26.35 million units of Open Interest in the March month contract and Axis Bank witnessed a contraction of 5.03 million units of Open Interest in the March month future contract.