Indian equity benchmark -- Nifty -- ended the session in red on Tuesday after the Economic Survey projected a lower growth of 6.5% for 2016-17. It also outlines three main downside risks to FY18 GDP growth forecast adding that demonetisation, rise in oil prices and global trade tensions will affect the growth forecast. Investors remained nervous with the CII-IBA Financial Conditions Index for the fourth quarter of this fiscal (FY17) fell below the 50 mark owing to banks and financial institutions expecting the overall financial conditions in the economy to deteriorate on account of worsening of external financial linkages and domestic economic activity. Steep fall in IT index also contributed to the losses after Donald Trump government introduced a bill in the US Congress that attempts to reform the H1-B visa process.
Traders were seen offloading their positions in IT, Pharma and PSU stocks, while buying was witnessed only in FMCG stocks. The top gainers from the F&O segment were Idea Cellular, Jaiprakash Associates and IFCI. On the other hand, the top losers were Bharti Infratel, Cadila Healthcare and Grasim Industries. In the index option segment, maximum OI continues to be seen in the 8600-9100 calls and 8000-8600 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 0.92% and reached 16.82. The 50-share Nifty was down by 71.45 points or 0.83% to settle at 8,561.30.
Nifty February 2017 futures closed at 8584.30 on Tuesday at a premium of 23 points over spot closing of 8561.30, while Nifty March 2017 futures ended at 8611.25, at a premium of 49.95 points over spot closing. Nifty February futures saw a contraction of 0.49 million (mn) units, taking the total outstanding open interest (OI) to 19.44 million (mn) units. The near month derivatives contract will expire on February 23, 2017.
From the most active contracts Idea Cellular February 2017 futures traded at a discount of 2.85 points at 107.30 compared with spot closing of 110.15. The numbers of contracts traded were 68,530.
Infosys February 2017 futures traded at a premium of 0.15 points at 929.55 compared with spot closing 929.40. The numbers of contracts traded were 36,049.
ICICI Bank February 2017 futures traded at a premium of 2.20 points at 270.25 compared with spot closing of 268.05. The numbers of contracts traded were 18,544.
Tata Consultancy Services February 2017 futures traded at a premium of 5.15 points at 2237.15 compared with spot closing of 2,232.00. The numbers of contracts traded were 16,120.
Tech Mahindra February 2017 futures traded at a discount of 1.15 points at 452.85 compared with spot closing of 454.00. The numbers of contracts traded were 14,357.Among Nifty calls, 8800 SP from the February month expiry was the most active call with an addition of 0.40 million open interests. Among Nifty puts, 8400 SP from the February month expiry was the most active put with an addition of 0.97 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.57 mn) and that for Puts was at 8400 SP (4.87 mn). The respective Support and Resistance levels of Nifty are: Resistance 8611.23--- Pivot Point 8581.82--- Support --- 8531.88.
The Nifty Put Call Ratio (PCR) finally stood at 0.96 for February month contract. The top five scrips with highest PCR on OI were Torrent Pharmaceuticals (4.00), IDEA (1.31), KPIT Technologies (1.29), Wipro (1.09) and Bharti Airtel (1.07).
Among most active underlying, Idea Cellular witnessed a contraction of 7.51 million units of Open Interest in the February month futures contract, followed by Infosys witnessing an addition of 0.57 million units of Open Interest in the February month contract, ICICI Bank witnessed an addition of 1.83 million units of Open Interest in the February month contract, Indian Oil Corporation witnessed an addition of 0.56 million units of Open Interest in the February month future contract and Tata Steel witnessed a contraction of 0.73 million units of Open Interest in the February month future contract.