Nifty ends in red zone; breaches 11,750 mark

After seesawing between the green and red territory, S&P Nifty snapped Thursday’s trade with a marginal cut of about 23 points, extending its fall for second consecutive day. It was a negative start to the markets, as traders remain concerned after India Ratings and Research marginally lowered country's Gross Domestic Product (GDP) growth projection for 2019-20 fiscal to 7.3% mainly due to below normal monsoon prediction and loss of momentum in industrial output. It had earlier projected India's GDP growth at 7.5%. Market soon pared all of its losses to trade in green zone, taking support from a report that the overall goods and services tax (GST) collections for the first month of the financial year 2019-20 came in at Rs 1.13 lakh crore, the highest level for any month since the comprehensive indirect tax’s launch in July 2017 and exactly in keeping with the Centre’s budget projection for the year. Some optimism also came with report that the growth of eight core sectors improved marginally to 4.7% in March 2019 against 4.5% in the same month last year.

Though, the buying proved short-lived as markets once again entered into red terrain in the afternoon deals, as anxiety remained among the investors with a monthly survey showing that India's manufacturing sector performance eased to an eight-month low in April as new business growth moderated, curbed by the elections and a challenging economic environment. The Nikkei India Manufacturing Purchasing Managers' Index declined from 52.6 in March to 51.8 in April, reflecting weakest improvement in business conditions since August 2018.

All sectoral indices ended in red on NSE except Financial Services and Realty. The top gainers from the F&O segment were Ajanta Pharma, Can Fin Homes and Vodafone Idea. On the other hand, the top losers were Jet Airways, Reliance Power and Escorts. 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 5.29% and reached 22.98. The 50-share Nifty was down by 23.40 points or 0.20% to settle at 11,724.75.

Nifty May 2019 futures closed at 11765.40 on Thursday, at a premium of 40.65 points over spot closing of 11724.75, while Nifty June 2019 futures ended at 11809.15, at a premium of 84.40 points over spot closing. Nifty May futures saw a contraction of 0.52 million (mn) units, taking the total outstanding open interest (OI) to 18.63 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 0.65 points at 174.65 compared with spot closing of 174.00. The numbers of contracts traded were 65,597.

Reliance Industries May 2019 futures traded at a premium of 9.85 points at 1412.95 compared with spot closing of 1403.10. The numbers of contracts traded were 32,264.

ICICI Bank May 2019 futures traded at a premium of 3.10 points at 397.85 compared with spot closing of 394.75. The numbers of contracts traded were 30,122.

Kotak Mahindra Bank May 2019 futures traded at a premium of 5.35 points at 1409.35 compared with spot closing of 1404.00. The numbers of contracts traded were 21,531.

HDFC Bank May 2019 futures traded at a discount of 3.00 points at 2353.00 compared with spot closing of 2356.00. The numbers of contracts traded were 21,239.

Among Nifty calls, 11,800 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 0.13 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 11,776.18 ---- Pivot Point 11,737.87 --- Support --- 11,686.43.

The Nifty Put Call Ratio (PCR) finally stood at 1.22 for May month contract. The top five scrips with highest PCR on OI were Mindtree (1.88), Gujarat State Fertilizers and Chemicals (1.68), Just Dial (1.66), Bosch (1.60) and Chennai Petroleum Corporation (1.50).

Among most active underlying, Reliance Industries witnessed an addition of 0.14 million units of Open Interest in the May month futures contract, followed by Yes Bank witnessing an addition of 0.36 million units of Open Interest in the May month contract, ICICI Bank witnessed an addition of 1.21 million units of Open Interest in the May month contract, State Bank of India witnessed a contraction of 0.29 million units of Open Interest in the May month contract and Tata Steel witnessed a contraction of 0.34 million units of Open Interest in the May month future contract.