Nifty end in red as traders book profit at record high

Selloff in the last leg of trade dragged Nifty below its crucial 11,700 mark as investors booked profits towards the fag-end of the session. Initially, the Indian benchmark made a strong opening, as investors cheered the Lok Sabha election results which showed that Narendra Modi government likely return to power. Traders also took encouragement with report that the finance ministry has prepared 100-day agenda for the new government with an aim to push the economy which has slipped to 6.6% in the third quarter of 2018-19, as the Lok Sabha election process coming to an end. Among other things, the agenda is likely to focus on increasing private investment, employment generation and giving relief to the farm sector. Buying further crept in with India Inc. expressing hope that a stable government at the centre will boost growth in the country and lead to higher foreign fund inflows as trends pointed to BJP and allies returning to power with a thumping majority.

However, the index succumbed to profit booking towards last leg of the session, as traders turned caution with a private report stating that the value of merger and acquisition deals announced in April stood at $735 million (over Rs 5,100 crore), a decline of 96 per cent from the year-ago period. According to a report, in April last year, the total M&A deal value stood at $19,142 million. Sentiment on the street weakened with another private report indicating that foreign direct investment (FDI) in India has been declining, even though recent US-China trade tensions and the increasing working population should ideally make the world's fastest-growing economy attractive for investors. This could be because of investors' pre-election nerves and also because of recent protectionist measures taken up by India.

All sectoral indices ended in red on NSE except Media and Realty. The top gainers from the F&O segment were Adani Ports and Special Economic Zone, Dish TV and Bharat Financial Inclusion. On the other hand, the top losers were Reliance Infrastructure, Vedanta and Allahabad Bank. In the index option segment, maximum OI continues to be seen in the 12,400-12,600 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 decreased by 29.77% and reached 19.40. The 50-share Nifty was down by 80.85 points or 0.69% to settle at 11,657.05.

Nifty May 2019 futures closed at 11692.40 on Thursday, at a premium of 35.35 points over spot closing of 11657.05, while Nifty June 2019 futures ended at 11729.55, at a premium of 72.50 points over spot closing. Nifty May futures saw a contraction of 0.32 million (mn) units, taking the total outstanding open interest (OI) to 17.34 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 discount of 0.30 points at 140.00 compared with spot closing of 140.30. The numbers of contracts traded were 68,231.

ICICI Bank May 2019 futures traded at a discount of 0.50 points at 411.00 compared with spot closing of 411.50. The numbers of contracts traded were 60,635.

Reliance Industries May 2019 futures traded at a premium of 2.50 points at 1338.50 compared with spot closing of 1336.00. The numbers of contracts traded were 58,864.

State Bank of India May 2019 futures traded at a premium of 1.10 points at 343.30 compared with spot closing of 342.20. The numbers of contracts traded were 53,812.

IndusInd Bank May 2019 futures traded at a premium of 4.05 points at 1601.95 compared with spot closing of 1597.90. The numbers of contracts traded were 48,832.  

Among Nifty calls, 12,000 SP from the May month expiry was the most active call with an addition of 0.99 million open interests. Among Nifty puts, 11,700 from the May month expiry was the most active put with a contraction of 0.07 million open interests. The maximum OI outstanding for Calls was at 12,500 SP (5.73 mn) and that for Puts was at 11,000 SP (3.83 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,927.30 ---- Pivot Point 11,770.90 --- Support --- 11,500.65.

The Nifty Put Call Ratio (PCR) finally stood at 0.63 for May month contract. The top five scrips with highest PCR on OI were Shree Cement (4.00), Page India (2.25), Mindtree (1.38), Bosch (1.28) and Titan (1.26).

Among most active underlying, State Bank of India witnessed an addition of 1.89 million units of Open Interest in the May month futures contract, followed by Reliance Industries witnessing an addition of 0.08 million units of Open Interest in the May month contract, ICICI Bank witnessed an addition of 2.79 million units of Open Interest in the May month contract, HDFC Bank witnessed an addition of 0.89 million units of Open Interest in the May month contract and IndusInd Bank witnessed a contraction of 0.004 million units of Open Interest in the May month future contract.