Last hour sell-off drags Nifty lower on Wednesday

After trading firmly till mid noon trade, domestic benchmark S&P CNX Nifty turned red and ended the day’s trade with a cut of about half a percentage point, weighed down by sharp selling in frontline counters. Indian equity market made a gap-up start, as traders remain energized with a report that India’s exports are likely to register an all-time high of $330 billion in FY19, amid slowing global merchandise trade growth. Besides, March exports are expected to be above $30 billion, buoyed by strong performances by engineering and pharmaceuticals sectors. Some optimism also came with Asian Development Bank’s report that India's growth is set to pick up and is expected to grow 7.2% in the current fiscal on strengthening consumption.

It was the last leg of trade which dragged markets to end near intraday low levels, as traders turned anxious after private weather forecaster Skymet said India’s monsoon rains were seen below normal this year. According to Skymet Weather, monsoon in 2019 was likely to be ‘below normal’ to the tune of 93 per cent of the long period average (LPA) of 887 mm for the fourth-month period from June to September. The markets also remained under pressure with International Monetary Fund (IMF) Managing Director Christine Lagarde’s statement that global growth has lost momentum amid rising trade tensions and tighter financial conditions, but pauses in rate hikes will help boost activity in the second half of 2019.

All sectoral indices ended in red on NSE. The top gainers from the F&O segment were Indiabulls Housing Finance, Siemens and Maruti Suzuki India. On the other hand, the top losers were Amara Raja Batteries, Jet Airways and Vodafone Idea. In the index option segment, maximum OI continues to be seen in the 11,800-12,200 calls and 11,300-11,700 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 3.87% and reached 18.78. The 50-share Nifty was down by 69.25 points 0.59% to settle at 11,643.95.

Nifty April 2019 futures closed at 11729.65 on Wednesday, at a premium of 85.70 points over spot closing of 11643.95, while Nifty May 2019 futures ended at 11796.20, at a premium of 152.25 points over spot closing. Nifty April futures saw a contraction of 0.37 million (mn) units, taking the total outstanding open interest (OI) to 15.62 mn units. The near month derivatives contract will expire on April 25, 2019.

From the most active contracts, Tata Motors April 2019 futures traded at a premium of 0.70 points at 202.50 compared with spot closing of 201.80. The numbers of contracts traded were 36,775.

Indiabulls Housing Finance April 2019 futures traded at a premium of 7.80 points at 876.75 compared with spot closing of 868.95. The numbers of contracts traded were 35,335.

Reliance Industries April 2019 futures traded at a premium of 9.25 points at 1383.85 compared with spot closing of 1374.60. The numbers of contracts traded were 27,385.

Yes Bank April 2019 futures traded at a premium of 1.75 points at 275.75 compared with spot closing of 274.00. The numbers of contracts traded were 23,702.

State Bank of India April 2019 futures traded at a premium of 2.00 points at 323.10 compared with spot closing of 321.10. The numbers of contracts traded were 22,666.

Among Nifty calls, 11,800 SP from the April month expiry was the most active call with an addition of 0.13 million open interests. Among Nifty puts, 11,700 from the April month expiry was the most active put with an addition of 0.29 million open interests. The maximum OI outstanding for Calls was at 12,000 SP (2.36mn) and that for Puts was at 11,500 SP (2.74mn). The respective Support and Resistance levels of Nifty are: Resistance 11,726.92 ---- Pivot Point 11,678.03 --- Support --- 11,595.07.

The Nifty Put Call Ratio (PCR) finally stood at 1.18 for April month contract. The top five scrips with highest PCR on OI were Bosch (1.56), Adani Power (1.31), Infosys (1.23), Mindtree (1.18) and Icici Prudential Life Insurance (1.07).

Among most active underlying, State Bank of India witnessed a contraction of 0.20 million units of Open Interest in the April month futures contract, followed by Reliance Industries witnessing an addition of 0.31 million units of Open Interest in the April month contract, Tata Motors witnessed an addition of 1.36 million units of Open Interest in the April month contract, Maruti Suzuki India witnessed an addition of 0.03 million units of Open Interest in the April month contract and Tata Steel witnessed an addition of 1.03 million units of Open Interest in the April month future contract.