Late wave of selling drags Nifty lower

After making optimistic start, Nifty finished last trading day of week in red zone. India VIX was down by 3.21%. Market made positive start after India’s industrial production inched up 1.9% in March 2022 from 1.7% in February 2022. Factory output measured in terms of Index of Industrial Production (IIP) had recorded a growth of 24.2 per cent in March 2021. For the month of March 2022, the Quick Estimates of IIP with base 2011-12 stood at 148.3. For the full fiscal 2021-22, IIP grew 11.3 per cent as against an 8.4 per cent contraction in 2020-21. Further, index extended its gains, as Finance Ministry in its latest monthly economic report said that India’s inflation trajectory in the coming months will be influenced more by the geo-political situation due to the war in Europe and its impact on supply chains and commodity prices.

Market continued its upward trade after commerce ministry said India's merchandise exports surged 30.7 per cent to $40.19 billion in April on account of healthy performance by sectors like petroleum products, electronic goods and chemicals, even as trade deficit widened to $20.11 billion during the month.  However, in the last leg of trade, index failed to protect its gains and ended the session in negative territory as traders got worried as country's foreign exchange reserves declined by $28.05 billion to $607.31 billion at the end of March this year from $635.36 billion at the end of September 2021. Sentiment was also weighed down by higher oil prices, which pressure the trade and current account deficits of India - the world's third-largest importer and consumer of oil.

Traders were seen piling positions in Auto, FMCG and Media sector while selling was witnessed in Metal, Bank and IT sector stocks. The top gainers from the F&O segment were RBL Bank, Tata Motors and IGL. On the other hand, the top losers were Honeywell Automation India, GNFC and Indus Tower. In the index option segment, maximum OI continues to be seen in the 16900 -17200 calls and 14450 -15600 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short-term expectation of volatility decreased by 3.21% and reached 23.49. The 50 share Nifty down by 25.85 points or 0.16% to settle at 15,782.15.

Nifty May 2022 futures closed at 15783.65 (LTP) on Friday, at a premium of 1.50 points over spot closing of 15782.15, while Nifty June 2022 futures ended at 15784.40 (LTP), at a premium of 2.25 points over spot closing. Nifty May futures saw a contraction of 12,547 units, taking the total outstanding open interest (OI) to 1,93,105 units. The near month derivatives contract will expire on May 26, 2022 (Provisional).

From the most active contracts, SBIN May 2022 futures traded at a discount of 5.40 points at 435.10 (LTP) compared with spot closing of 440.50. The numbers of contracts traded were 73,741 (Provisional).

Tata Motors May 2022 futures traded flat with its spot closing of 404.00. The numbers of contracts traded were 53,416 (Provisional).

Reliance Industries May 2022 futures traded at a premium of 2.55 points at 2434.00 (LTP) compared with spot closing of 2431.45. The numbers of contracts traded were 48,398 (Provisional).

HDFC Bank May 2022 futures traded at a discount of 0.95 points at 1291.55 (LTP) compared with spot closing of 1292.50. The numbers of contracts traded were 30,383 (Provisional).

Infosys May 2022 futures traded at a premium of 3.05 points at 1504.95 (LTP) compared with spot closing of 1501.90. The numbers of contracts traded were 26,610 (Provisional).

Among, Nifty calls, 16000 SP from the May month expiry was the most active call with a contraction of 7,763 units open interests. Among Nifty puts, 15500 SP from the May month expiry was the most active put with an addition of 5,793 units open interests. The maximum OI outstanding for Calls was at 17000 SP (73,352 units) and that for Puts was at 15500 SP (60,120 units). The respective Support and Resistance levels of Nifty are: Resistance 15,996.88 -- Pivot Point 15,868.87 -- Support -- 15,654.13.

The Nifty Put Call Ratio (PCR) finally stood at (1.05) for May month contract. The top five scrips with highest PCR on Gujrat Gas (0.91), RBL Bank (0.75), IGL (0.75), Adani Enterprises (0.74) and TVS Motors (0.73).

Among most active underlying, SBIN witnessed an addition of 9,260 units of Open Interest in the May month futures contract, Tata Motors witnessed an addition of 1,473 units of Open Interest in the May month futures contract, Reliance Industries witnessed an addition of 1,747 units of Open Interest in the May month futures contract, HDFC Bank witnessed an addition of 897 units of Open Interest in the May month futures contract and ICICI Bank witnessed an addition of 2,535 units of Open Interest in the May month futures contract (Provisional).