Nifty ends below neutral line on Wednesday

S&P CNX – Nifty finished volatile trading session in red zone. Index made positive start, as rating agency Icra has forecasted the economy to grow 12-13 per cent in the first quarter of the current fiscal, citing the second highest business activity index reading in 13 months in April. Further, market extended its gains, as the Reserve Bank of India (RBI) in its article has said that improving infrastructure, ensuring low and stable inflation, and maintaining macroeconomic stability is critical for reviving animal spirits and spurring growth. It noted that the Indian economy consolidated its recovery, with most constituents surpassing pre-pandemic levels of activity.

However, in afternoon session market turned volatile, as S&P Global Ratings cut India's growth projection for the current fiscal to 7.3 percent from 7.8 percent earlier on rising inflation and the longer-than-expected Russia-Ukraine conflict. In its Global Macro Update to Growth Forecasts, S&P said inflation remaining higher for a long is a worry, which requires central banks to raise rates more than what is currently priced in, risking a harder landing, including a larger hit to output and employment. In late afternoon session, market continued to trade between positive and negative territory till the end and finally closed the session below neutral line. 

Most of the sectoral indices ended in red except FMCG, Healthcare and Pharma. The top gainers from the F&O segment were MCX, Granules India and Petronet LNG. On the other hand, the top losers were Dr. Lal PathLabs, Delta Corp and Metropolis Healthcare. In the index option segment, maximum OI continues to be seen in the 16900 -17200 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 decreased by 1.96% and reached 22.30. The 50 share Nifty down by 19.00 points or 0.12% to settle at 16,240.30.

Nifty May 2022 futures closed at 16237.00 (LTP) on Wednesday, at a discount of 3.30 points over spot closing of 16240.30, while Nifty June 2022 futures ended at 16247.60 (LTP), at a premium of 7.30 points over spot closing. Nifty May futures saw a contraction of 5,175 units, taking the total open interest (contracts) to 1,71,383 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 1.75 points at 2544.00 (LTP) compared with spot closing of 2542.25. The numbers of contracts traded were 40,050 (Provisional).

Bharti Airtel May 2022 futures traded at a discount of 2.95 points at 691.50 (LTP) compared with spot closing of 694.45. The numbers of contracts traded were 32,190 (Provisional).

HDFC Bank May 2022 futures traded at a premium of 1.15 points at 1317.00 (LTP) compared with spot closing of 1315.85. The numbers of contracts traded were 25,564 (Provisional).

Infosys May 2022 futures traded at a premium of 1.35 points at 1515.90 (LTP) compared with spot closing of 1514.55. The numbers of contracts traded were 22,302 (Provisional).

Tata Steel May 2022 futures traded at a premium of 0.95 points at 1182.95 (LTP) compared with spot closing of 1182.00. The numbers of contracts traded were 22,060 (Provisional).

Among, Nifty calls, 16300 SP from the May month expiry was the most active call with a contraction of 13,190 units open interests. Among Nifty puts, 16000 SP from the May month expiry was the most active put with an addition of 5,971 units open interests. The maximum OI outstanding for Calls was at 17000 SP (80,746 units) and that for Puts was at 16000 SP (97,219 units). The respective Support and Resistance levels of Nifty are: Resistance 16,356.33 -- Pivot Point 16,283.77 -- Support -- 16,167.73.

The Nifty Put Call Ratio (PCR) finally stood at (1.02) for May month contract. The top five scrips with highest PCR on Eicher Motors (1.13), TVS Motors (1.01), Gujrat Gas (0.95), Apollo Tyre (0.91) and MRF (0.89).

Among most active underlying, Reliance Industries witnessed a contraction of 747 units of Open Interest in the May month futures contract, Bharti Airtel witnessed an addition of 6,191 units of Open Interest in the May month futures contract, HDFC Bank witnessed a contraction of 3,199 units of Open Interest in the May month futures contract, ICICI Bank witnessed a contraction of 3,895 units of Open Interest in the May month futures contract and Bajaj Finance witnessed an addition of 1,973 units of Open Interest in the May month futures contract (Provisional).