Nifty finishes slightly in red

After witnessing bloodbath in the morning deals, domestic benchmark CNX S&P Nifty pared most of its losses and ended the day’s trade with a marginal cut of about 6 points as recovery in IT and Metal stocks helped the sentiments. The day began on a negative note, as traders remained concerned with the India Meteorological Department’s (IMD) statement that pre-monsoon rainfall from March to April, a phenomenon critical to agriculture in some parts of the country, has recorded 27 per cent deficiency. The IMD recorded 43.3 millimetres of rainfall across the country from March 1 to April 24 as against the normal precipitation of 59.6 millimetres. This was 27 per cent less of the Long Period Average (LPA). Cautiousness also crept in with private report stating that the decline in economic growth momentum in October-December quarter of FY19 is likely to continue. As per the report, subdued consumption demand and election related uncertainty is expected to weigh on India's industrial production.

Market remained negative in late afternoon session with a private report stating that surging global oil prices will pose a first big challenge to India's new government, whoever wins an election now underway, especially as domestic prices have been allowed to lag, meaning consumers are in for a painful surge as they catch up. But, the markets witnessed a face saving trend reversal in final hours that led the major indices to pare most of its early losses, as traders found some solace with Union minister Suresh Prabhu’s statement that the country is working on district-based developmental model to achieve aggregate growth. He said if the national growth was at 6% and those of the districts was 4%, the aggregate growth would be 10%.

Traders were seen piling up positions in Media, Metal and IT, while selling was witnessed in PSU Bank, Realty and Auto. The top gainers from the F&O segment were JSW Steel, Zee Entertainment Enterprises and Indian Oil Corporation. On the other hand, the top losers were Yes Bank, Reliance Power and Reliance Infrastructure. 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 0.51% and reached 21.82. The 50-share Nifty was down by 6.50 points or 0.06% to settle at 11,748.15.

Nifty May 2019 futures closed at 11791.55 on Tuesday, at a premium of 43.40 points over spot closing of 11748.15, while Nifty June 2019 futures ended at 11851.70, at a premium of 103.55 points over spot closing. Nifty May futures saw a contraction of 0.39 million (mn) units, taking the total outstanding open interest (OI) to 19.15 mn units. The near month derivatives contract will expire on May 30, 2019.

From the most active contracts, Yes Bank May 2019 futures traded at a premium of 1.00 points at 167.75 compared with spot closing of 166.75. The numbers of contracts traded were 1,23,698.

Kotak Mahindra Bank May 2019 futures traded at a premium of 7.30 points at 1392.30 compared with spot closing of 1385.00. The numbers of contracts traded were 40,284.

ICICI Bank May 2019 futures traded at a discount of 3.90 points at 405.75 compared with spot closing of 409.65. The numbers of contracts traded were 28,448.

Reliance Industries May 2019 futures traded at a premium of 7.70 points at 1400.15 compared with spot closing of 1392.45. The numbers of contracts traded were 25,839.

Indiabulls Housing Finance May 2019 futures traded at a discount of 1.75 points at 689.45 compared with spot closing of 691.20. The numbers of contracts traded were 25,747.

Among Nifty calls, 11,700 SP from the May month expiry was the most active call with an addition of 0.01 million open interests. Among Nifty puts, 11,700 from the May month expiry was the most active put with an addition of 0.03 million open interests. The maximum OI outstanding for Calls was at 12,000 SP (1.20mn) and that for Puts was at 11,000 SP (2.19 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,784.30 ---- Pivot Point 11,720.10 --- Support --- 11,683.95.

The Nifty Put Call Ratio (PCR) finally stood at 1.24 for May month contract. The top five scrips with highest PCR on OI were Mindtree (2.01), Bosch (1.56), Chennai Petroleum Corporation (1.50), Gujarat State Fertilizers and Chemicals (1.44) and Kajaria Ceramics (1.31).

Among most active underlying, Yes Bank witnessed an addition of 11.08 million units of Open Interest in the May month futures contract, followed by Reliance Industries witnessing a contraction of 0.15 million units of Open Interest in the May month contract, Kotak Mahindra Bank witnessed a contraction of 0.82 million units of Open Interest in the May month contract, Tata Steel witnessed an addition of 0.25 million units of Open Interest in the May month contract and ICICI Bank witnessed a contraction of 1.49 million units of Open Interest in the May month future contract.