Indian equity benchmark -- Nifty -- continued its downward slide for the third straight day and closed in red on Wednesday, amid increasing concerns regarding US President Donald Trump's economic growth agenda. Investor’s sentiments remained downbeat with the private report that India's GDP growth is expected to slow to 6.7 percent in the January-March quarter of this fiscal year as overall activity is yet to bounce back to levels seen prior to demonetisation. The report further noted that a pick-up in headline CPI inflation, better global conditions (exports) and narrowing interest rate differentials (with the US) have lowered the probability of a rate cut and increased the probability of a hike. Some selling also crept in with the government's proposal to reduce cash transactions limit to Rs 2 lakh from Rs 3 lakh. Some concern also came with Minister of State for Finance Arjun Ram Meghwal’s statement that it is not possible to assess the impact of note ban on India’s gross domestic product (GDP) as the economic development of a country depends on a number of factors including structural, external, fiscal and monetary factors.
Traders were seen piling up positions only in Realty and Pharma stocks, while selling was witnessed in PSU, FMCG and Auto stocks. The top gainers from the F&O segment were Indo Count Industries, Lupin and Hindustan Petroleum Corporation. On the other hand, the top losers were Just Dial, Punjab National Bank and The India Cements. 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 increased by 2.74% and reached 12.27. The 50-share Nifty down up by 91.05 points or 1.00% to settle at 9,030.45.
Nifty March 2017 futures closed at 9050.40 on Wednesday at a premium of 19.95 points over spot closing of 9030.45, while Nifty April 2017 futures ended at 9078.90, at a premium of 48.45 points over spot closing. Nifty March futures saw an addition of 0.32 million (mn) units, taking the total outstanding open interest (OI) to 26.18 million (mn) units. The near month derivatives contract will expire on March 30, 2017.
From the most active contracts, Axis Bank March 2017 futures traded at a premium of 0.55 points at 486.05 compared with spot closing of 485.50. The numbers of contracts traded were 24,779.
Divi's Laboratories March 2017 futures traded at a premium of 1.65 points at 627.70 compared with spot closing of 626.05. The numbers of contracts traded were 21,604.
Reliance Industries March 2017 futures traded at a premium of 3.70 points at 1264.15 compared with spot closing of 1,260.45. The numbers of contracts traded were 16,265.
ICICI Bank March 2017 futures traded at a premium of 0.85 points at 266.05 compared with spot closing of 265.20. The numbers of contracts traded were 14,854.
Vedanta March 2017 futures traded at a premium of 1.10 points at 261.80 compared with spot closing of 260.70. The numbers of contracts traded were 14,768.
Among Nifty calls, 9100 SP from the March month expiry was the most active call with an addition of 1.31 million open interests. Among Nifty puts, 9100 SP from the March month expiry was the most active put with a contraction of 1.48 million open interests. The maximum OI outstanding for Calls was at 9200 SP (6.42 mn) and that for Puts was at 8900 SP (5.42 mn). The respective Support and Resistance levels of Nifty are: Resistance 9062.47 --- Pivot Point 9040.88--- Support --- 9008.87.
The Nifty Put Call Ratio (PCR) finally stood at 1.01 for March month contract. The top five scrips with highest PCR on OI were Kotak Mahindra Bank (1.47), HDFC Bank (1.11), Adani Ports & Special Economic Zone (1.01), Ultratech Cement (0.99), and KPIT Technologies (0.93).
Among most active underlying, Axis Bank witnessed an addition of 0.27 million units of Open Interest in the March month futures contract, followed by Reliance Industries witnessing a contraction of 0.27 million units of Open Interest in the March month contract, Idea Cellular witnessed an addition of 0.07 million units of Open Interest in the March month contract, Vedanta witnessed a contraction of 0.96 million units of Open Interest in the March month future contract and Tata Steel witnessed an addition of 0.26 million units of Open Interest in the March month future contract.