Nifty ends marginal lower on Thursday

Nifty ended volatile day of trade marginally lower. Index made positive start with the finance ministry’s statement that with the muted impact of the third wave of the pandemic on economic activity, the Indian economy may undergo an economic reset by end of the year, clocking 9 per cent growth in 2021-22 (FY22) and around 8 per cent in 2022-23 (FY23). Further, market entered into red territory, as traders were cautious with Acuite Ratings & Research’s statement that India’s FY22 current account deficit faces mild upside risk from high commodity prices. The wider merchandise trade deficits pulled India's Q2FY22 current account into the negative territory.

However, market wiped out all its losses to trade in green, as Finance Minister Nirmala Sitharaman pitched for expeditious and equitable distribution of vaccines to aid global recovery. She shared insights on India’s policy response to pandemic and suggested that recovery measures have to be built around a long-term vision. But, market took U-turn and ended the session below neutral line. Traders were concerned after Reserve Bank of India’s article stating that the manufacturing sector will need continued policy support for smoother and faster recovery to attain the long-term trend path. It said although the sector may soon attain its pre-COVID level, the process of attaining the long-term trend levels may take some time.

Most of the sectoral indices ended in red except FMCG and Oil& Gas. The top gainers from the F&O segment were Shriram Transport Finance Company, Navin Fluorine International and Cummins India. On the other hand, the top losers were Muthoot Finance, National Aluminium Company and NMDC. In the index option segment, maximum OI continues to be seen in the 17800 -18200 calls and 16900 -17150 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short-term expectation of volatility increased by 6.85% and reached 22.01. The 50 share Nifty down by 17.60 points or 0.10% to settle at 17,304.60.

Nifty February 2022 futures closed at 17262.10 (LTP) on Thursday, at a discount of 42.50 points over spot closing of 17304.60, while Nifty March 2022 futures ended at 17319.00 (LTP), at a premium of 14.40 points over spot closing. Nifty February futures saw an addition of 14,635 units, taking the total open interest (contracts) to 2,12,419 units. The near month derivatives contract will expire on February 24, 2022 (Provisional).

From the most active contracts, Reliance Industries February 2022 futures traded at a discount of 0.90 points at 2440.10 (LTP) compared with spot closing of 2441.00. The numbers of contracts traded were 38,062 (Provisional).

Tata Steel February 2022 futures traded at a discount of 0.90 points at 1189.10 (LTP) compared with spot closing of 1190.00. The numbers of contracts traded were 25,814 (Provisional).

Adani Ports February 2022 futures traded at a premium of 2.00 points at 735.00 (LTP) compared with spot closing of 733.00. The numbers of contracts traded were 25,137 (Provisional).

HDFC February 2022 futures traded at a discount of 1.25 points at 2406.65 (LTP) compared with spot closing of 2407.90. The numbers of contracts traded were 23,313 (Provisional).

ICICI Bank February 2022 futures traded at a premium of 0.80 points at 748.40 (LTP) compared with spot closing of 747.60. The numbers of contracts traded were 19,387 (Provisional).

Among, Nifty calls, 17400 SP from the February month expiry was the most active call with a contraction of 18,605 units open interests. Among Nifty puts, 17300 SP from the February month expiry was the most active put with an addition of 14,497 units open interests. The maximum OI outstanding for Calls was at 18000 SP (78,346 units) and that for Puts was at 17000 SP (99,650 units). The respective Support and Resistance levels of Nifty are: Resistance 17,419.72 -- Pivot Point 17,327.78 -- Support --17,212.67.

The Nifty Put Call Ratio (PCR) finally stood at (1.03) for February month contract. The top five scrips with highest PCR on Havells India (1.00), Vedanta (0.90), Escorts (0.90), Shriram Transport Finance Company (0.79) and Voltas (0.76).

Among most active underlying, Adani Ports witnessed an addition of 18 units of Open Interest in the February month futures contract, Reliance Industries witnessed an addition of 4,248 units of Open Interest in the February month futures contract, Tata Motors witnessed an addition of 569 units of Open Interest in the February month futures contract, ICICI Bank witnessed an addition of 3,034 units of Open Interest in the February month futures contract and HDFC witnessed a contraction of 245 units of Open Interest in the February month futures contract (provisional).