Nifty ends with huge losses on Friday

Indian equity benchmark Nifty ended with huge losses on Friday. The start of the day was on a negative note, as continuous foreign fund outflows and mixed corporate earnings results impacted traders’ sentiments. So far this week, foreign investors have net sold Indian equities worth $635 million, compared with $881 million offloaded in the same period last week. Sentiments remained negative during the day, as India Ratings said inflation, supply chain disruptions and a weak consumption demand could upset the revival in credit growth in the medium term. It said the reversal of the interest rate cycle -- marked by the Reserve Bank of India’s 40 basis points increase in policy repo rate -- would weigh down credit growth as borrowings become costlier.

Index remained under pressure during the entire day, amid a private report stating that India's central bank hiked its key lending rate in a surprise move fearing 'shocker' inflation numbers for April, adding the ultimate aim is to reverse its pandemic-era ultra-loose rate regime. Adding some more worries, India has raised concerns at the World Trade Organization (WTO) over a host of trade barriers built in by Indonesia, including export restrictions on palm oil and import curbs on bovine meat and automotive (auto) parts, holding that such measures have adversely impacted India. Some worries came as consequent to the 40 basis point hike in the repo rate announced by the Reserve Bank of India (RBI), large banks such as ICICI Bank and Bank of Baroda have raised their lending rates by an equal amount on loans linked to the external benchmark.

All the sectoral indices ended in red. The top gainers from the F&O segment were Tata Communications, Hero Motocorp and Tech Mahindra. On the other hand, the top losers were Cholamandalam Investment and Finance, Voltas and Coforge. In the index option segment, maximum OI continues to be seen in the 16900 -17200 calls and 15900 -16100 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short-term expectation of volatility increased by 4.71% and reached 21.25. The 50 share Nifty down by 271.40 points or 1.63% to settle at 16,411.25.

Nifty May 2022 futures closed at 16431.45 (LTP) on Friday, at a premium of 20.20 points over spot closing of 16411.25, while Nifty June 2022 futures ended at 16439.90 (LTP), at a premium of 28.65 points over spot closing. Nifty May futures saw an addition of 18,228 units, taking the total open interest (OI) to 2,25,415 mn units. The near month derivatives contract will expire on May 26, 2022 (Provisional).

From the most active contracts, Reliance Industries May 2022 futures traded at a premium of 11.55 points at 2639.55 (LTP) compared with spot closing of 2628.00. The numbers of contracts traded were 49,610 (Provisional).

HDFC Bank May 2022 futures traded at a discount of 13.60 points at 1307.45 (LTP) compared with spot closing of 1321.05. The numbers of contracts traded were 29,091 (Provisional).

Infosys May 2022 futures traded at a discount of 0.75 points at 1544.25 (LTP) compared with spot closing of 1545.00. The numbers of contracts traded were 28,824 (Provisional).

Tata Steel May 2022 futures traded at a premium of 2.40 points at 1289.40 (LTP) compared with spot closing of 1287.00. The numbers of contracts traded were 24,295 (Provisional).

SBIN May 2022 futures traded at a discount of 4.15 points at 481.35 (LTP) compared with spot closing of 485.50. The numbers of contracts traded were 21,417 (Provisional).

Among, Nifty calls, 16500 SP from the May month expiry was the most active call with an addition of 17,232 units open interests. Among Nifty puts, 16400 SP from the May month expiry was the most active put with an addition of 12,657 units open interests. The maximum OI outstanding for Calls was at 17000 SP (52,296 units) and that for Puts was at 16000 SP (83,547 units). The respective Support and Resistance levels of Nifty are: Resistance 16,483.33 -- Pivot Point 16,412.12 -- Support -- 16,340.03.

The Nifty Put Call Ratio (PCR) finally stood at (1.39) for May month contract. The top five scrips with highest PCR on Adani Enterprises (0.87), Hero Motocorp (0.78), Torrent Pharmaceuticals (0.74), Torrent Power (0.73) and Manappuram Finance (0.71).

Among most active underlying, Reliance Industries witnessed an addition of 7,052 units of Open Interest in the May month futures contract, HDFC Bank witnessed an addition of 3,788 units of Open Interest in the May month futures contract, Bajaj Finance witnessed an addition of 1,205 units of Open Interest in the May month futures contract, SBIN witnessed a contarction of 1,742 units of Open Interest in the May month futures contract and ICICI Bank witnessed an addition of 1,683 units of Open Interest in the May month futures contract (Provisional).