Nifty ends lower after RBI hikes key rate

Indian benchmark -- Nifty -- snapped the day’s trade in the red after the Reserve Bank raised the key interest rate by 50 basis points. After making positive start, market soon slipped into red zone for little time, as the World Bank cut India's economic growth forecast for the current fiscal to 7.5 per cent as rising inflation, supply chain disruptions and geopolitical tensions taper recovery. This is the second time that the World Bank has revised its GDP growth forecast for India in the current fiscal 2022-23 (April 2022 to March 2023). In April, it had trimmed the forecast from 8.7 per cent to 8 per cent. Further, market gained traction, as the Reserve Bank of India (RBI) in its latest data has showed that Bank credit grew by 11.04 per cent to Rs 120.27 lakh crore and deposits up by 9.27 per cent to Rs 165.74 lakh crore in the fortnight ended May 20, 2022. However, in late afternoon session market slipped into red zone, as RBI Governor Shaktikanta Das said the Ukraine-Russia war has led to globalisation of inflation and is posing new challenges, as the central bank upped the inflation projection to 6.7 per cent for current fiscal year. In April, RBI had projected retail inflation at 5.7 per cent for 2022-23. Finally, Nifty closed the day’s trade below 16400 mark.

Traders were seen piling positions in Auto, IT and Media sector while selling was witnessed in Bank, FMCG and Oil & Gas sector stocks. The top gainers from the F&O segment were Glenmark, Dalmia Bharat and SBI Card. On the other hand, the top losers were Deepak Nitrite, GNFC and Gujrat Gas. 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 2.87% and reached 19.84. The 50 share Nifty down by 60.10 points or 0.37% to settle at 16,356.25.

Nifty June 2022 futures closed at 16355.00 (LTP) on Wednesday, at a discount of 1.25 points over spot closing of 16356.25, while Nifty July 2022 futures ended at 16375.00 (LTP), at a premium of 18.75 points over spot closing. Nifty June futures saw an addition of 6,722 units, taking the total open interest (contracts) to 2,30,872 units. The near month derivatives contract will expire on June 30, 2022 (Provisional).

From the most active contracts, Reliance Industries June 2022 futures traded at a premium of 7.90 points at 2729.90 (LTP) compared with spot closing of 2722.00. The numbers of contracts traded were 32,925 (Provisional).

Bharti Airtel June 2022 futures traded at a premium of 1.45 points at 666.35 (LTP) compared with spot closing of 664.90. The numbers of contracts traded were 17,878 (Provisional).

SBIN June 2022 futures traded at a premium of 0.40 points at 471.40 (LTP) compared with spot closing of 471.00. The numbers of contracts traded were 17,159(Provisional).

Tata Steel June 2022 futures traded at a discount of 49.50 points at 1036.75 (LTP) compared with spot closing of 1086.25. The numbers of contracts traded were 16,494 (Provisional).

Infosys June 2022 futures traded at a premium of 6.40 points at 1504.90 (LTP) compared with spot closing of 1498.50. The numbers of contracts traded were 15,716 (Provisional).

Among, Nifty calls, 16500 SP from the June month expiry was the most active call with an addition of 868 units open interests. Among Nifty puts, 16000 SP from the June month expiry was the most active put with an addition of 278 units open interests. The maximum OI outstanding for Calls was at 17000 SP (48,458 units) and that for Puts was at 16000 SP (79,480 units). The respective Support and Resistance levels of Nifty are: Resistance 16,482.58 -- Pivot Point 16,387.97 -- Support --16,261.63.

The Nifty Put Call Ratio (PCR) finally stood at (1.29) for June month contract. The top five scrips with highest PCR on Hero Motocorp (1.19), Atul (1.12), Indus Tower (1.01), RBL Bank (0.98) and Power Grid Corporation (0.88).

Among most active underlying, Reliance Industries witnessed an addition of 575 units of Open Interest in the June month futures, ICICI Bank witnessed an addition of 828 units of Open Interest in the June month futures contract, SBIN witnessed an addition of 636 units of Open Interest in the June month futures, Bajaj Finance witnessed a contraction of 215 units of Open Interest in the June month futures and Bharti Airtel witnessed an addition of 3,323 units of Open Interest in the June month futures contract (Provisional).