Snapping four-day winning streak, domestic equity benchmark --Nifty-- closed Tuesday’s trading session in the negative zone amid sluggish global cues. Traders remained cautious, ahead of the Reserve Bank of India's (RBI’s) policy meeting, with views split on whether it will cut interest rates. Sentiments remained pessimistic with Commerce Minister Nirmala Sitharaman’s statement that the proposed changes in the regime for issuing H-1B visas for skilled workers by the US government will have an impact on Indian companies and the Commerce Ministry will soon hold a meeting with the industry to discuss its strategy for dealing with it. On sectoral front, some steel stocks came under pressure on report that the government would not extend protectionist minimum import price (MIP) on 19 colour-coated steel products. The development comes a day after Steel Minister Chaudhary Birendra Singh stated that industry must gear up to face global competition as protectionist measures like MIP and anti-dumping cannot continue indefinitely. However, public sector banking stocks edged higher with credit rating agency, Icra’s report that RBI’s new guidelines on Basel III compliant Additional Tier-1 (AT1) bonds have strengthened the banks' ability to service the coupon, thereby partially reducing the default risks for many state-run banks (PSBs).
Traders were seen offloading their positions in Metal, Pharma and Auto stocks, while buying was witnessed only in PSU stocks. The top gainers from the F&O segment were Torrent Power, Marico and CESC. On the other hand, the top losers were Adani Enterprises, Jaiprakash Associates and Tata Motors. In the index option segment, maximum OI continues to be seen in the 8700-9200 calls and 8100-8800 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 0.82% and reached 13.50. The 50-share Nifty was down by 32.75 points or 0.37% to settle at 8768.30.
Nifty February 2017 futures closed at 8785.55 on Tuesday at a premium of 17.25 points over spot closing of 8768.30, while Nifty March 2017 futures ended at 8812.10, at a premium of 43.80 points over spot closing. Nifty February futures saw a contraction of 0.28 million (mn) units, taking the total outstanding open interest (OI) to 21.56 million (mn) units. The near month derivatives contract will expire on February 23, 2017.
From the most active contracts Punjab National Bank February 2017 futures traded at a discount of 0.50 points at 151.30 compared with spot closing of 151.80. The numbers of contracts traded were 32,293.
Bharat Heavy Electricals February 2017 futures traded at a premium of 0.60 points at 151.95 compared with spot closing of 151.35. The numbers of contracts traded were 27,091.
Infosys February 2017 futures traded at a discount of 0.80 points at 945.20 compared with spot closing of 946.00. The numbers of contracts traded were 21,029.
ITC February 2017 futures traded at a premium of 1.25 points at 278.20 compared with spot closing of 276.95. The numbers of contracts traded were 18,004.
CEAT February 2017 futures traded at a premium of 5.00 points at 1145.05 compared with spot closing of 1,140.05. The numbers of contracts traded were 15,946.
Among Nifty calls, 8800 SP from the February month expiry was the most active call with an addition of 0.14 million open interests. Among Nifty puts, 8700 SP from the February month expiry was the most active put with a contraction of 0.14 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.16 mn) and that for Puts was at 8500 SP (5.72 mn). The respective Support and Resistance levels of Nifty are: Resistance 8804.72--- Pivot Point 8772.88--- Support --- 8736.47.
The Nifty Put Call Ratio (PCR) finally stood at 1.18 for February month contract. The top five scrips with highest PCR on OI were Sun TV Network (2.19), Oracle Financial Services Software (2.00), Bharti Airtel (1.30), Maruti Suzuki India (1.30) and IDEA (1.15).
Among most active underlying, Punjab National Bank witnessed an addition of 4.03 million units of Open Interest in the February month futures contract, followed by Bharat Heavy Electricals witnessing an addition of 1.29 million units of Open Interest in the February month contract, ITC witnessed an addition of 1.18 million units of Open Interest in the February month contract, Tata Steel witnessed an addition of 1.17 million units of Open Interest in the February month future contract and Infosys witnessed an addition of 1.17 million units of Open Interest in the February month future contract.