NSE gauge -- Nifty50 -- witnessed considerable losses on Monday, sliding below its crucial 11,600 level during the day. It was a negative start to the markets, as traders were cautious with report that in a first in recent history of tax filings, income tax e-filings in FY2019 have dropped. Income tax e-filings in FY 2018-19 was 6.68 crore, down from 6.74 crore in the previous fiscal. This is surprising given that post demonetisation it was expected that the tax base would continue to increase. Traders took note of a report that Economic Affairs Secretary Subhash Chandra Garg’s statement that Asian Development Bank (ADB) must expand its private sector operations to boost economic development. He said there is a rising need for the agency to focus on strengthening human capital and develop social safety nets.
Market continued its weak run in the afternoon session, as sentiment remained largely negative with a private survey showing that India's services sector expanded at its slowest pace in seven months in April as some businesses postponed decisions and expansion plans until seeing results of the general election currently under way. The Nikkei/IHS Markit Services Purchasing Managers' Index slipped to 51.0 in April, the lowest since September, down from 52.0 the previous month. Traders shrugged off a report that with a view to facilitate fundraising by start-ups, the Department for Promotion of Industry and Internal Trade (DPIIT) has proposed relaxation in the income tax laws pertaining to sale of residential properties and carrying forward of losses.
All sectoral indices ended in red on NSE except IT. The top gainers from the F&O segment were PC Jeweller, Tata Chemicals and Raymond. On the other hand, the top losers were Reliance Capital, Zee Entertainment Enterprises and Dewan Housing Finance Corporation. In the index option segment, maximum OI continues to be seen in the 11,900-12,100 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 9.99% and reached 26.43. The 50-share Nifty was down by 114.00 points or 0.97% to settle at 11,598.25.
Nifty May 2019 futures closed at 11656.35 on Monday, at a premium of 58.10 points over spot closing of 11598.25, while Nifty June 2019 futures ended at 11699.30, at a premium of 101.05 points over spot closing. Nifty May futures saw an addition of 0.33 million (mn) units, taking the total outstanding open interest (OI) to 19.06 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 2.55 points at 404.35 compared with spot closing of 401.80. The numbers of contracts traded were 40,865.
Yes Bank May 2019 futures traded at a premium of 0.60 points at 167.60 compared with spot closing of 167.00. The numbers of contracts traded were 27,564.
Reliance Industries May 2019 futures traded at a premium of 11.45 points at 1394.40 compared with spot closing of 1382.95. The numbers of contracts traded were 20,562.
Tata Motors May 2019 futures traded at a premium of 1.40 points at 201.50 compared with spot closing of 200.10. The numbers of contracts traded were 19,399.
Tata Steel May 2019 futures traded at a premium of 2.75 points at 539.25 compared with spot closing of 536.50. The numbers of contracts traded were 18,258.
Among Nifty calls, 11,700 SP from the May month expiry was the most active call with an addition of 0.06 million open interests. Among Nifty puts, 11,600 from the May month expiry was the most active put with an addition of 0.14 million open interests. The maximum OI outstanding for Calls was at 12,000 SP (1.47 mn) and that for Puts was at 11,000 SP (2.35 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,630.08 ---- Pivot Point 11,600.72 --- Support --- 11,568.88.
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 (2.28), Just Dial (1.43), NIIT Technologies (1.25), ICICI Prudential Life Insurance (1.21) and Petronet LNG (1.10).
Among most active underlying, ICICI Bank witnessed an addition of 3.24 million units of Open Interest in the May month futures contract, followed by Reliance Industries witnessing a contraction of 0.49 million units of Open Interest in the May month contract, Tata Steel witnessed a contraction of 1.16 million units of Open Interest in the May month contract, State Bank of India witnessed an addition of 1.48 million units of Open Interest in the May month contract and Yes Bank witnessed an addition of 2.48 million units of Open Interest in the May month future contract.
