Nifty closes slightly in red

The CNX Nifty finished slightly in red on Wednesday’s trading session.  The market made a strong positive start and traded in green for the most part of the day, as traders took encouragement with the Reserve Bank of India’s (RBI) statement that it will infuse Rs 12,500 crore of liquidity into the system through purchase of government bonds. Based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the RBI has decided to conduct purchase of five government securities. Market participants took a note of a private report that seven million jobs were formalised between 2015 and 2018 because of various measures, including GST, demonetisation, Skill India policies, fixed-term contract, maternity leave enhancement, among others. The report estimated job formalisation to the tune of 11 million between 2018 and 2021.

However, the market erased all of its early gains to enter into negative territory in the late afternoon deals, as Healthcare, Auto and PSU Banking shares witnessed selling. In the last leg of the trade, key index managed to pare most of losses, as traders found solace with a private report stating that the Centre is considering the establishment of a special purpose vehicle (SPV) to monitor, screen, and rate commercial borrowers. One of the initiatives the new government will work on in its first 100 days, the SPV, similar to the Goods and Services Tax Network (GSTN) will form a database compiling information from public sector banks (PSBs).

Traders were seen piling up positions in Realty, Metal and Media stocks, while selling was witnessed in Pharma, Auto and PSU Bank. The top gainers from the F&O segment were Tata Steel, Zee Entertainment Enterprises and Biocon. On the other hand, the top losers were Jain Irrigation Systems, Jet Airways (India) and Reliance Capital. In the index option segment, maximum OI continues to be seen in the 11,900-12,100 calls and 11,200-11,700 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 0.89 and reached 14.73. The 50-share Nifty was down by 0.05 points to settle at 11,691.45.

Nifty June 2019 futures closed at 11708.60 on Wednesday, at a premium of 17.15 points over spot closing of 11691.45, while Nifty July 2019 futures ended at 11741.75, at a premium of 50.30 points over spot closing. Nifty June futures saw a contraction of 0.52 million (mn) units, taking the total outstanding open interest (OI) to 17.82 mn units. The near month derivatives contract will expire on June 27, 2019.

From the most active contracts, Indiabulls Housing Finance June 2019 futures traded at a discount of 2.70 points at 555.30 compared with spot closing of 558.00. The numbers of contracts traded were 1,41,336.

Yes Bank June 2019 futures traded at a discount of 0.35 points at 103.60 compared with spot closing of 103.95. The numbers of contracts traded were 59,172.

Reliance Industries June 2019 futures traded at a discount of 0.35 points at 1281.65 compared with spot closing of 1282.00. The numbers of contracts traded were 27,671.

IndusInd Bank June 2019 futures traded at a premium of 11.15 points at 1382.15 compared with spot closing of 1371.00. The numbers of contracts traded were 26,913.

Tata Steel June 2019 futures traded at a discount of 3.65 points at 494.15 compared with spot closing of 497.80. The numbers of contracts traded were 26,043.

Among Nifty calls, 11,800 SP from the June month expiry was the most active call with an addition of 0.26 million open interests. Among Nifty puts, 11,700 from the June month expiry was the most active put with a addition of 0.31 million open interests. The maximum OI outstanding for Calls was at 12,000 SP (2.59 mn) and that for Puts was at 11,500 SP (2.73 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,787.60 -- Pivot Point 11,706.35 -- Support -- 11,610.20.

The Nifty Put Call Ratio (PCR) finally stood at 1.22 for June month contract. The top five scrips with highest PCR on OI were Bosch (1.64), TCS (1.51), Birlasoft (1.38), MRPL (1.28) and Colgate-Palmolive (1.26).