Nifty continues southbound journey for fourth straight session

Nifty continued its southbound journey for fourth straight session. Market made cautious start, as Crisil Ratings in a report said that non-banking financial companies are likely to witness close to Rs 18 lakh crore of their outstanding debt getting repriced at higher levels in FY23 amid the rising interest rate scenario. The agency expects borrowing cost of NBFCs (Non-Banking Financial Companies) to go up by 85-105 basis points (bps) in this fiscal owing to recent hikes in repo rate by 90 basis points in two tranches and an expected rise of another 75 bps in the remaining fiscal.

Further, market turned volatile, as credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the sharp rise in the interest rate is likely to affect the volume in non-priority sector lending (PSL) securitisation in the near term, unlike that of PSL transactions, which are more driven by regulatory requirements. Market altering between green and red zone and finally slipped in to red zone in the last leg of trade after India's trade deficit widened to a record $24.29 billion in May 2022 from $6.53 billion in the same month last year due to a sharp jump in the country's imports. The merchandise trade deficit in May 2022 is the highest ever monthly gap. On a year-on-year basis, it has surged by 271.96 per cent.

Traders were seen piling up positions in Bank, Auto and Financial Services sectors while selling was witnessed in FMGC, IT and Media sectors’ stocks. The top gainers from the F&O segment were Bajaj Finserve, STAR and IGL. On the other hand, the top losers were Canara Bank, Tata Communication and Delta Crop. In the index option segment, maximum OI continues to be seen in the 16900 -17200 calls and 15400 -16550 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short-term expectation of volatility increased by 1.18% and reached 22.15. The 50 share Nifty down by 39.95 points or 0.25% to settle at 15,692.15.

Nifty June 2022 futures closed at 15701.00 (LTP) on Wednesday, at a premium of 8.85 points over spot closing of 15692.15, while Nifty July 2022 futures ended at 15722.00 (LTP), at a premium of 29.85 points over spot closing. Nifty June futures saw an addition of 5,641 units, taking the total outstanding open interest (OI) to 2,20,138 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 2.45 points at 2598.25 (LTP) compared with spot closing of 2595.80. The numbers of contracts traded were 30,804 (Provisional).

Infosys June 2022 futures traded at a premium of 1.70 points at 1423.00 (LTP) compared with spot closing of 1421.30. The numbers of contracts traded were 18,124 (Provisional).

Tata Steel June 2022 futures traded at a discount of 0.50 points at 960.00 (LTP) compared with spot closing of 960.50. The numbers of contracts traded were 17,988 (Provisional).

HDFC Bank June 2022 futures traded at a premium of 2.80 points at 1311.25 (LTP) compared with spot closing of 1308.45. The numbers of contracts traded were 17,224 (Provisional).

Bajaj Finance June 2022 futures traded at a discount of 5.00 points at 5490.00 (LTP) compared with spot closing of 5495.00. The numbers of contracts traded were 15,396 (Provisional).

Among, Nifty calls, 15800 SP from the June month expiry was the most active call with an addition of 5,259 units open interests. Among Nifty puts, 15700 SP from the June month expiry was the most active put with an addition of 16,105 units open interests. The maximum OI outstanding for Calls was at 17000 SP (51,781 units) and that for Puts was at 15500 SP (71,540 units). The respective Support and Resistance levels of Nifty are: Resistance 15,757.57 -- Pivot Point 15,718.23 -- Support -- 15,652.82.

The Nifty Put Call Ratio (PCR) finally stood at (1.16) for June month contract. The top five scrips with highest PCR on Hero Motocorp (1.39), REC (1.26), Indus Tower (1.06), Bandhan Bank (0.94) and ACC (0.91).

Among most active underlying, Reliance Industries witnessed an addition of 2,363 units of Open Interest in the June month futures, HDFC Bank witnessed an addition of 2,772 units of Open Interest in the June month futures contract, Bajaj Finance witnessed an addition of 428 units of Open Interest in the June month futures, ICICI Bank witnessed an addition of 1,514 units of Open Interest in the June month futures contract and HDFC witnessed an addition of 1,881 units of Open Interest in the June month futures contract (Provisional).