Indian equity benchmark -- Nifty -- recovered from the day’s low and closed slightly in red on Tuesday, extending losses for the second consecutive session. A strong rupee against dollar and broadly positive global cues aided the market to pare some losses. Sentiments remained downbeat with the private report that if the UP government fulfils its farmer loan waiver promise, banks are likely to take a hit of Rs 27,420 crore and the scheme will lead to some stress on the state's fiscal arithmetic. The BJP had, in its UP election manifesto, promised to waive farmers’ loans if elected to power. However, downside remained capped with the report that Cabinet cleared four supporting GST legislations, paving the way for their introduction in Parliament. Once approved by Parliament, the states would start taking their SGST bill for discussion and passage in the respective state assemblies. On sectoral front, stocks of some Non-Banking Financial Companies traded lower with Moody’s Investors Service’s report that as a fall-out of demonetisation, the Non-Banking Financial Companies (NBFCs) will come under pressure for the next six months.
Traders were seen piling up positions in Realty, FMCG and Media stocks, while selling was witnessed in Pharma, PSU and Auto stocks. The top gainers from the F&O segment were MRF, IFCI and Housing Development and Infrastructure Limited. On the other hand, the top losers were Divi's Laboratories, Idea Cellular and Dr. Reddy's Laboratories. In the index option segment, maximum OI continues to be seen in the 8900-9500 calls and 8400-9100 puts indicating this is the trading range expectation.
The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 0.62% and reached 11.94. The 50-share Nifty down up by 5.35 points or 0.06% to settle at 9,121.50.
Nifty March 2017 futures closed at 9143.00 on Tuesday at a premium of 21.50 points over spot closing of 9121.50, while Nifty April 2017 futures ended at 9174.80, at a premium of 53.30 points over spot closing. Nifty March futures saw an addition of 0.29 million (mn) units, taking the total outstanding open interest (OI) to 25.86 million (mn) units. The near month derivatives contract will expire on March 30, 2017.
From the most active contracts, Divi's Laboratories March 2017 futures traded at a premium of 6 points at 636.85 compared with spot closing of 630.85. The numbers of contracts traded were 41,097.
Idea Cellular March 2017 futures traded at a premium of 0.50 points at 93.35 compared with spot closing of 92.85. The numbers of contracts traded were 22,062.
Dr. Reddy's Laboratories March 2017 futures traded at a premium of 14.55 points at 2624.55 compared with spot closing of 2,610.00. The numbers of contracts traded were 15,717.
Reliance Industries March 2017 futures traded at a premium of 3.30 points at 1268.50 compared with spot closing of 1,265.20. The numbers of contracts traded were 15,598.
Yes Bank March 2017 futures traded at a discount of 2 points at 1488.55 compared with spot closing of 1,490.55. The numbers of contracts traded were 15,453.
Among Nifty calls, 9200 SP from the March month expiry was the most active call with an addition of 0.31 million open interests. Among Nifty puts, 9100 SP from the March month expiry was the most active put with a contraction of 0.07 million open interests. The maximum OI outstanding for Calls was at 9200 SP (6.35 mn) and that for Puts was at 8800 SP (5.55 mn). The respective Support and Resistance levels of Nifty are: Resistance 9150.43--- Pivot Point 9118.82--- Support --- 9089.88.
The Nifty Put Call Ratio (PCR) finally stood at 1.12 for March month contract. The top five scrips with highest PCR on OI were Kotak Mahindra Bank (1.30), HDFC Bank (1.15), Ultratech Cement (1.04), Adani Ports & Special Economic Zone (1.03) and Indusind Bank (1.03).
Among most active underlying, Idea Cellular witnessed an addition of 3.08 million units of Open Interest in the March month futures contract, followed by Yes Bank witnessing a contraction of 0.08 million units of Open Interest in the March month contract, Reliance Industries witnessed an addition of 0.28 million units of Open Interest in the March month contract, Divi's Laboratories witnessed an addition of 2.49 million units of Open Interest in the March month future contract and Tata Steel witnessed a contraction of 0.06 million units of Open Interest in the March month future contract.