Late wave of selling drags Nifty lower

Intensified selling towards the fag end of the day dragged domestic index S&P CNX Nifty to end the session with a cut of over half a percent point weighed down by sharp selling in frontline counters. Equity market made a cautions start amid growth concerns after the International Monetary Fund (IMF) lowered Gross Domestic Product (GDP) outlook for India as well as the global economy. The IMF has moderately scaled down India’s economic growth projection to 7.3 per cent for the current financial year from its earlier forecast of 7.4 per cent and suggested that the country should continue to undertake economic reforms, including hire and fire, to create jobs. Adding to some woes, finance ministry stated that the government has fallen short of Rs 50,000 crore in its direct tax collection target of Rs 12 lakh crore for 2018-19.

Sharp selling in last leg of trade mainly played spoil sports for domestic bourses and dragged them to their intraday lows, as the International Monetary Fund (IMF) cut its global growth forecast to the lowest level since the financial crisis, warning of significant downside risks to the world economy including trade tensions, pockets of political instability, mounting debt levels and increasing inequality. Traders shrugged off a report that the government has managed to meet the revised fiscal deficit target of 3.4 percent of the GDP after it cut last minute expenditure and rolled over fuel subsidies to make up for the shortfall in tax collection.

All sectoral indices ended in red on NSE except Realty, Pharma, and Auto. The top gainers from the F&O segment were Infibeam Avenues, PC Jeweller and Godfrey Phillips India. On the other hand, the top losers were DLF, Indiabulls Housing Finance and Bharti Airtel. In the index option segment, maximum OI continues to be seen in the 11,800-12,200 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 4.19% and reached 21.13. The 50-share Nifty was down by 87.65 points 0.75% to settle at 11,584.30.

Nifty April 2019 futures closed at 11652.90 on Wednesday, at a premium of 68.60 points over spot closing of 11584.30, while Nifty May 2019 futures ended at 11719.45, at a premium of 135.15 points over spot closing. Nifty April futures saw a contraction of 0.18 million (mn) units, taking the total outstanding open interest (OI) to 15.67 mn units. The near month derivatives contract will expire on April 25, 2019.

From the most active contracts, HDFC Bank April 2019 futures traded at a premium of 18.25 points at 2255.15 compared with spot closing of 2236.90. The numbers of contracts traded were 57,771.

Tata Motors April 2019 futures traded at a premium of 1.10 points at 216.90 compared with spot closing of 215.80. The numbers of contracts traded were 38,920.

Indiabulls Housing Finance April 2019 futures traded at a premium of 6.15 points at 830.85 compared with spot closing of 824.70. The numbers of contracts traded were 25,107.

Reliance Industries April 2019 futures traded at a premium of 8.45 points at 1339.45 compared with spot closing of 1331.00. The numbers of contracts traded were 24,715.

Yes Bank April 2019 futures traded at a premium of 1.20 points at 269.75 compared with spot closing of 268.55. The numbers of contracts traded were 20,001.

Among Nifty calls, 11,700 SP from the April month expiry was the most active call with an addition of 0.24 million open interests. Among Nifty puts, 11,600 from the April month expiry was the most active put with a contraction of 0.01 million open interests. The maximum OI outstanding for Calls was at 12,000 SP (3.22mn) and that for Puts was at 11,000 SP (2.80mn). The respective Support and Resistance levels of Nifty are: Resistance 11,652.32 ---- Pivot Point 11,612.03 --- Support --- 11,544.02.

The Nifty Put Call Ratio (PCR) finally stood at 1.19 for April month contract. The top five scrips with highest PCR on OI were Shree Cement (3.00), Bosch (1.52), Adani Power (1.31), ICICI Prudential Life Insurance (1.05) and Mind Tree (0.97).

Among most active underlying, HDFC Bank witnessed an addition of 2.94 million units of Open Interest in the April month futures contract, followed by Tata Motors witnessing an addition of 0.82 million units of Open Interest in the April month contract, Reliance Industries witnessed a contraction of 0.46 million units of Open Interest in the April month contract, ICICI Bank witnessed an addition of 1.12 million units of Open Interest in the April month contract and State Bank of India witnessed a contraction of 0.50 million units of Open Interest in the April month future contract.