News Analysis

Nifty ends in red after last hour sell-off

Updated on 15 May 2019 06:04 PM

Selloff in the last leg of trade dragged Nifty below its crucial 11,200 mark and the benchmark ended the session with a cut of over half a per cent. It was a negative start to the markets, as traders remained optimistic with rating agency Crisil’s report that recovery of stressed assets through the Insolvency and Bankruptcy Code (IBC) was two-times at Rs 70,000 crore compared to that through other mechanisms in 2018-19 but resolution timelines for bad loans still remains an issue. Sentiment got boost after the private report that the Indian private equity (PE) market remained a hotbed for deal making in 2018 with investments across 793 deals at $26.3 billion, which was the second highest in the last decade in terms of total investment value.

However, markets took U-turn and pared all of their gains in the last leg of the session, as traders turned anxious with dampening prospects of higher farm and economic growth in the $2.6 trillion economy, monsoon rains are expected to hit Kerala coast on June 4 and deliver less rainfall than average in 2019. The country is likely to receive 93% rainfall of the long period average. The domestic sentiments remained down beaten with a private report stating that venture investments in the country declined marginally to $26.3 billion in 2018, even though there was a surge in number of deals announced. Investments by venture capital and private equity funds in the country declined in 2018 from $26.8 billion in the previous year.

All sectoral indices ended in red on NSE except IT and Realty. The top gainers from the F&O segment were SRF, Bajaj Finance and Eicher Motors. On the other hand, the top losers were Union Bank of India, Dish TV India and Dewan Housing Finance Corporation. In the index option segment, maximum OI continues to be seen in the 11,900-12,100 calls and 10,800-11,200 puts indicating this is the trading range expectation.




India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 5.62% and reached 28.65. The 50-share Nifty was down by 65.05 points or 0.58% to settle at 11,157.00.

Nifty May 2019 futures closed at 11177.45 on Wednesday, at a premium of 20.45 points over spot closing of 11157.00, while Nifty June 2019 futures ended at 11218.25, at a premium of 61.25 points over spot closing. Nifty May futures saw a contraction of 0.52 million (mn) units, taking the total outstanding open interest (OI) to 15.70 mn units. The near month derivatives contract will expire on May 30, 2019.

From the most active contracts, Yes Bank May 2019 futures traded at a premium of 1.00 points at 143.35 compared with spot closing of 142.35. The numbers of contracts traded were 49,227.

Zee Entertainment Enterprises May 2019 futures traded at a premium of 1.65 points at 324.25 compared with spot closing of 322.60. The numbers of contracts traded were 42,973.

Reliance Industries May 2019 futures traded at a premium of 3.70 points at 1259.70 compared with spot closing of 1256.00. The numbers of contracts traded were 36,254.

Jubilant Foodworks May 2019 futures traded at a premium of 0.70 points at 1245.70 compared with spot closing of 1245.00. The numbers of contracts traded were 30,197.

Indiabulls Housing Finance May 2019 futures traded at a premium of 12.30 points at 707.00 compared with spot closing of 694.70. The numbers of contracts traded were 28,504.

Among Nifty calls, 11,300 SP from the May month expiry was the most active call with an addition of 0.08 million open interests. Among Nifty puts, 11,200 from the May month expiry was the most active put with an addition of 0.02 million open interests. The maximum OI outstanding for Calls was at 12,000 SP (3.01mn) and that for Puts was at 11,000 SP (2.87 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,250.22 ---- Pivot Point 11,193.58 --- Support --- 11,100.37.

The Nifty Put Call Ratio (PCR) finally stood at 1.00 for May month contract. The top five scrips with highest PCR on OI were Mindtree (1.70), Bosch (1.46), Petronet LNG (1.37), Page India (1.25) and NIIT Technologies (1.23).

Among most active underlying, Reliance Industries witnessed an addition of 0.47 million units of Open Interest in the May month futures contract, followed by State Bank of India witnessing a contraction of 1.62 million units of Open Interest in the May month contract, Yes Bank witnessed an addition of 3.36 million units of Open Interest in the May month contract, Zee Entertainment Enterprises witnessed a contraction of 0.44 million units of Open Interest in the May month contract and Jubilant Foodworks witnessed an addition of 0.41 million units of Open Interest in the May month future contract.