Last hour sell-off drag Nifty lower

After trading firmly till afternoon deals, domestic benchmark S&P CNX Nifty ended the day’s trade marginally in red, weighed down by selling in frontline counters. Indian benchmark kicked-off the session with positive numbers, as traders took some support with a report that India was the biggest recipient of funds from Asian Development Bank last year and would continue to get sovereign loans in excess of $3 billion in 2019 as well. The multilateral funding institution committed $3 billion in sovereign loans to India in 2018, the highest level of assistance since sovereign operations began in the country in 1986. Sentiment on the street also improved as the group of 25 influential American lawmakers has urged the US Trade Representative not to terminate the GSP programme with India after the expiry of the 60-day notice on Friday, saying the country's companies seeking to expand their exports to India could be affected. The Generalized System of Preference (GSP) is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.

In the early afternoon session, the index continued to trade in positive trajectory, taking support from Union minister Nitin Gadkari’s statement that development has always been the top agenda of the government and the centre has given impetus to infrastructure projects in the last five year. However, markets soon wiped out all of their early gains to enter into negative territory, as traders turned pessimistic with the Finance Ministry’s monthly report stating that India’s economy slowed down slightly in the last fiscal due to declining growth in private consumption, slow increase in fixed investment and muted exports, though it is still fastest growing major economy. It further said there is slowdown of growth in agriculture and sustained growth in industry as well as some challenges.

Traders were seen piling up positions in Realty, PSU Bank and PVT Bank stocks, while selling was witnessed in IT, FMCG and Pharma. The top gainers from the F&O segment were Reliance Power, Dewan Housing Finance Corporation and Bharat Forge. On the other hand, the top losers were Cadila Healthcare, PC Jeweller and Tata Communications. In the index option segment, maximum OI continues to be seen in the 12,200-12,800 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 4.57% and reached 24.03. The 50-share Nifty was down by 12.50 points or 0.11% to settle at 11,712.25.

Nifty May 2019 futures closed at 11764.30 on Friday, at a premium of 52.05 points over spot closing of 11712.25, while Nifty June 2019 futures ended at 11806.85, at a premium of 94.60 points over spot closing. Nifty May futures saw an addition of 0.23 million (mn) units, taking the total outstanding open interest (OI) to 18.86 mn units. The near month derivatives contract will expire on May 30, 2019.

From the most active contracts, ICICI Bank May 2019 futures traded at a premium of 2.25 points at 405.00 compared with spot closing of 402.75. The numbers of contracts traded were 31,849.

Yes Bank May 2019 futures traded at a premium of 1.25 points at 177.05 compared with spot closing of 175.80. The numbers of contracts traded were 31,352.

Reliance Industries May 2019 futures traded at a premium of 5.20 points at 1415.10 compared with spot closing of 1409.90. The numbers of contracts traded were 22,224.

Indiabulls Housing Finance May 2019 futures traded at a discount of 6.20 points at 701.65 compared with spot closing of 707.85. The numbers of contracts traded were 21,963.

Tata Motors May 2019 futures traded at a premium of 1.55 points at 211.10 compared with spot closing of 209.55. The numbers of contracts traded were 19,953.       

Among Nifty calls, 11,800 SP from the May month expiry was the most active call with an addition of 0.05 million open interests. Among Nifty puts, 11,700 from the May month expiry was the most active put with an addition of 0.004 million open interests. The maximum OI outstanding for Calls was at 13 12,500 SP (1.32 mn) and that for Puts was at 11,000 SP (2.20 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,755.65 ---- Pivot Point 11,727.50 --- Support --- 11,684.10.

The Nifty Put Call Ratio (PCR) finally stood at 1.19 for May month contract. The top five scrips with highest PCR on OI were Mindtree (2.20), Just Dial (1.55), Bosch (1.45), Gujarat State Fertilizers and Chemicals (1.28) and NIIT Technologies (1.24).

Among most active underlying, Reliance Industries witnessed a contraction of 0.61 million units of Open Interest in the May month futures contract, followed by ICICI Bank witnessing an addition of 4.46 million units of Open Interest in the May month contract, Tata Motors witnessed an addition of 1.14 million units of Open Interest in the May month contract, State Bank of India witnessed an addition of 2.11 million units of Open Interest in the May month contract and Tata Consultancy Services witnessed an addition of 0.32 million units of Open Interest in the May month future contract.