Nifty extends downward trade for third straight session

Nifty extended its downward trade for third straight session amid a sell-off in IT stocks. Market made positive start after Union Minister for Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Piyush Goyal said that India has taken a series of strict measures to tame inflation, keep interest rates in check and rein-in rupee depreciation so that growth and prosperity are not affected. Afterwards, index trimmed some of its gains, as Former World Bank chief economist Kaushik Basu said that even though the fundamentals of the Indian economy are strong, the rise in divisiveness and polarisation in the country is damaging the foundations of the nation’s growth. Some cautiousness also came in with report that India was ranked at the 54th place in a global travel and tourism development index, down from 46th in 2019, but still remained on the top within South Asia. However, in late morning session, market erased all its gains to trade below neutral line, as export of engineering goods to CIS countries including Russia and Ukraine fell the most year-on-year during April 2022, while that to North America registered the highest growth during this period, according to an EEPC India analysis. Market continued its weak trade till the end and finished the session with the cut of above half a percent.

All the sectoral indices ended in red except Bank and Financial Services. The top gainers from the F&O segment were CONCOR, Balkrishna Industries and ICICI Lombard General Insurance Co. On the other hand, the top losers were Delta Corp, Granules India and Chambal Fertilisers & Chemicals. In the index option segment, maximum OI continues to be seen in the 16100 -16300 calls and 15300 -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 1.37% and reached 25.28. The 50 share Nifty down by 99.35 points or 0.62% to settle at 16,025.80.

Nifty May 2022 futures closed at 16015.95 (LTP) on Wednesday, at a discount of 9.85 points over spot closing of 16025.80, while Nifty June 2022 futures ended at 16018.30 (LTP), at a discount of 7.50 points over spot closing. Nifty May futures saw an addition of 7,899 units, taking the total open interest (Contracts) to 1,31,348 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 discount of 2.75 points at 2610.65 (LTP) compared with spot closing of 2613.40. The numbers of contracts traded were 67,894 (provisional).

HDFC Bank May 2022 futures traded at a premium of 0.10 points at 1327.60 (LTP) compared with spot closing of 1327.50. The numbers of contracts traded were 40,653 (provisional).

Infosys May 2022 futures traded at a premium of 0.45 points at 1418.45 (LTP) compared with spot closing of 1418.00. The numbers of contracts traded were 39,970 (provisional).

ICICI Bank May 2022 futures traded at a discount of 0.80 points at 713.50 (LTP) compared with spot closing of 714.30. The numbers of contracts traded were 24,207 (provisional).

HDFC May 2022 futures traded at a premium of 4.55 points at 2240.60 (LTP) compared with spot closing of 2236.05. The numbers of contracts traded were 22,285 (provisional).

Among, Nifty calls, 16200 SP from the May month expiry was the most active call with an addition of 1,16,045 units open interests. Among Nifty puts, 16000 SP from the May month expiry was the most active put with a contraction of 18,505 units open interests. The maximum OI outstanding for Calls was at 16200 SP (1,94,603 units) and that for Puts was at 15500 SP (1,50,314 units). The respective Support and Resistance levels of Nifty are: Resistance 16,163.78 -- Pivot Point 16,085.37 -- Support -- 15,947.38.

The Nifty Put Call Ratio (PCR) finally stood at (0.64) for May month contract. The top five scrips with highest PCR on Ashok Leyland (1.16), Dr Reddy's Laboratories (1.14), Eicher Motors (1.10), Gujarat Gas (1.09) and Kotak Mahindra Bank (1.07).

Among most active underlying, Reliance Industries witnessed an addition of 2,201 units of Open Interest in the May month futures contract, HDFC Bank witnessed a contraction of 2,556 units of Open Interest in the May month futures contract, ICICI Bank witnessed a contraction of 89 units of Open Interest in the May month futures contract, Infosys witnessed an addition of 3,210 units of Open Interest in the May month futures contract and HDFC witnessed a contraction of 284 units of Open Interest in the May month futures contract (Provisional).