Last leg of selling pressure drag Nifty lower

After trading in green zone for most of time, Nifty closed first trading day of week below 16250 mark. After making cautious start, soon index added points, as the commerce and industry ministry said that total foreign direct investment into India rose 2 per cent to the highest ever $83.57 billion in 2021-22 on account of various measures like policy reforms and ease of doing business taken by the government. Further, index extended its gains, as retirement fund body EPFO has added 15.32 lakh subscribers in March 2022, over 19 percent more than 12.85 lakh enrolled in February this year. Meanwhile, the Indian government is considering spending an additional 2 trillion rupees ($26 billion) in the 2022/23 fiscal year to cushion consumers from rising prices and fight multi-year high inflation. Market continued its upward trade but failed to hold gains and in last leg of trade market slipped in to red zone with report that the outflow of funds from domestic markets has continued as Foreign Portfolio Investors (FPI) remain net sellers. So far in the month of May, FPIs have pulled out Rs 37,216 crore as headwinds such as tighter monetary policy and rising inflation force investors towards safer havens.

All the sectoral indices ended in red except Auto, IT and Consumer Durables. The top gainers from the F&O segment were Container Corporation of India, Ashok Leyland and M&M. On the other hand, the top losers were Tata Steel, JSW Steel and Jindal Steel & Power. 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 increased by 1.28% and reached 23.40. The 50 share Nifty down by 51.45 points or 0.32% to settle at 16,214.70.

Nifty May 2022 futures closed at 16164.85 (LTP) on Monday, at a discount of 49.85 points over spot closing of 16214.70, while Nifty June 2022 futures ended at 16163.00 (LTP), at a discount of 51.70 points over spot closing. Nifty May futures saw an addition of 5,559 units, taking the total open interest (Contracts) to 1,56,587 units. The near month derivatives contract will expire on May 26, 2022 (Provisional).

From the most active contracts, Tata Steel May 2022 futures traded at a discount of 0.35 points at 1026.00 (LTP) compared with spot closing of 1026.35. The numbers of contracts traded were 61,447 (Provisional).

Reliance Industries May 2022 futures traded at a premium of 2.55 points at 2605.05 (LTP) compared with spot closing of 2602.50. The numbers of contracts traded were 51,279 (Provisional).

HDFC Bank May 2022 futures traded at a premium of 1.70 points at 1303.00 (LTP) compared with spot closing of 1301.30. The numbers of contracts traded were 43,911 (Provisional).

Infosys May 2022 futures traded at a premium of 0.55 points at 1470.10 (LTP) compared with spot closing of 1469.55. The numbers of contracts traded were 32,891 (Provisional).

ICICI Bank May 2022 futures traded at a premium of 1.85 points at 710.85 (LTP) compared with spot closing of 709.00. The numbers of contracts traded were 25,740 (Provisional).

Among, Nifty calls, 16400 SP from the May month expiry was the most active call with an addition of 23,823 units open interests. Among Nifty puts, 16200 SP from the May month expiry was the most active put with a contraction of 421 units open interests. The maximum OI outstanding for Calls was at 17000 SP (2,03,998 units) and that for Puts was at 16000 SP (1,54,618 units). The respective Support and Resistance levels of Nifty are: Resistance 16,357.68 --Pivot Point 16,271.72 -- Support -- 16,128.73.

The Nifty Put Call Ratio (PCR) finally stood at (0.95) for May month contract. The top five scrips with highest PCR on Dr Reddy's Laboratories (1.30), Eicher Motors (1.09), HUL (1.07), Gujarat Gas (1.04) and Ashok Leyland (0.98).

Among most active underlying, Reliance Industries witnessed an addition of 6,613 units of Open Interest in the May month futures contract, HDFC Bank witnessed an addition of 1,794 units of Open Interest in the May month futures contract, Tata Steel witnessed a contraction of 639 units of Open Interest in the May month futures contract, ICICI Bank witnessed a contraction of 1,308 units of Open Interest in the May month futures contract and Adani Ports witnessed an addition of 11,044 units of Open Interest in the May month futures contract (Provisional).