Late wave of selling drags Nifty lower

The local benchmark -- Nifty -- ended last trading day of week on negative note. Market made positive start, as the third quarterly employment survey (QES) by the labour ministry showed that employment in nine select non-farm sectors stood at 31.45 million in the October-December 2021 quarter, 0.39 million more than the July-September period and 0.65 million higher than April-June, 2021. Market continued its above neutral line trade, as PM Modi said ‘India is headed for robust economic growth. We have the world's fastest-growing Startup Ecosystem.’ Besides, with an aim to reduce imports of the country, the commerce ministry has made a case for encouraging domestic manufacturing of 102 items like chemicals, electronic products and insulin injection as their share in the country’s total imports are high.

Market extended its gains till late afternoon session but market failed to protect gains and slipped into red zone as traders were cautious as the rating agency ICRA said capacity utilisation in India is expected to dip in the first quarter of current fiscal and is expected to gradually rise by the third quarter, and indicated that the economic recovery will be hurt by the Russia Ukraine tensions, however it will see recovery by the end of the year. Finally, Nifty closed the session with the cut of above half a percent.

All the sectoral indices ended in red. The top gainers from the F&O segment were Shriram Transport Finance Company, Indian Hotels Company and MCX. On the other hand, the top losers were Axis Bank, MGL and Can Fin Homes. In the index option segment, maximum OI continues to be seen in the 17900 -18200 calls and 15900 -16200 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short-term expectation of volatility increased by 0.19% and reached 19.42. The 50 share Nifty down by 142.50 points or 0.83% to settle at 17,102.55.

Nifty May 2022 futures closed at 17133.00 (LTP) on Friday, at a premium of 30.45 points over spot closing of 17102.55, while Nifty June 2022 futures ended at 17157.45 (LTP), at a premium of 54.90 points over spot closing. Nifty May futures saw an addition of 14,372 units, taking the total open interest (contracts) to 1,84,680 units. The near month derivatives contract will expire on May 26, 2022 (Provisional).

From the most active contracts, HDFC Bank May 2022 futures traded at a discount of 11.40 points at 1370.60 (LTP) compared with spot closing of 1382.00. The numbers of contracts traded were 44,587 (Provisional).

Axis Bank May 2022 futures traded at a premium of 1.05 points at 731.05 (LTP) compared with spot closing of 730.00. The numbers of contracts traded were 38,461 (Provisional).

Reliance Industries May 2022 futures traded at a premium of 8.45 points at 2808.15 (LTP) compared with spot closing of 2799.70. The numbers of contracts traded were 36,900 (Provisional).

Wipro May 2022 futures traded at a premium of 0.05 points at 508.05 (LTP) compared with spot closing of 508.00. The numbers of contracts traded were 27,271 (Provisional).

Maruti Suzuki May 2022 futures traded at a premium of 19.00 points at 7700.00 (LTP) compared with spot closing of 7681.00. The numbers of contracts traded were 26,902 (Provisional).

Among, Nifty calls, 17300 SP from the May month expiry was the most active call with an addition of 5,406 units open interests. Among Nifty puts, 17000 SP from the May month expiry was the most active put with a contraction of 353 units open interests. The maximum OI outstanding for Calls was at 18000 SP (38,554 units) and that for Puts was at 16000 SP (70,059 units). The respective Support and Resistance levels of Nifty are: Resistance 17,302.38 -- Pivot Point 17,177.82 -- Support -- 16,977.98.

The Nifty Put Call Ratio (PCR) finally stood at (1.70) for May month contract. The top five scrips with highest PCR on Alkem Laboratories (1.20), Shree Cement (1.15), Aarti Industries (1.02), Jindal Steel & Power (0.95) and Adani Enterprises (0.90).

Among most active underlying, Axis Bank witnessed an addition of 10,586 units of Open Interest in the May month futures contract, HDFC Bank witnessed an addition of 145 units of Open Interest in the May month futures contract, Reliance Industries witnessed an addition of 3,135 units of Open Interest in the May month futures contract, ICICI Bank witnessed a contraction of 95 units of Open Interest in the May month futures contract and Maruti Suzuki witnessed an addition of 2,730 units of Open Interest in the May month futures contract (Provisional).