Paring all its early gains, Indian equity benchmark -- Nifty -- ended marginally lower on Friday as jitters returned over the first round of French presidential elections on Sunday after a shooting in Paris. The polls show a nail-bitingly close race between four candidates, setting the stage for heightened volatility. Besides, hawkish RBI tone in its latest minutes and consistent selling by FIIs, also dampened sentiments. RBI's monetary policy committee cited upside risks to inflation arising from price pressure excluding food and fuel as the main reason for keeping its policy rate unchanged. The six-member monetary policy committee (MPC), which aims to bring down inflation to 4% in the medium term, maintained its hawkish stance on inflation, with most members expressing concern over upside risks to core inflation. Further, Foreign Portfolio Investors (FPIs) sold stocks worth a net Rs 90.49 crore into the secondary equity markets on 20 April 2017, compared with net outflow of Rs 629.14 crore on 19 April 2017. Meanwhile, sugar stocks gained traction after the Uttar Pradesh government asked sugar mills to clear cane dues of farmers within next 14 days, while assuring their delegation that it will give all facilities to establish new mills in the state.
Traders were seen piling up positions in Realty, Telecom and Energy stocks, while selling was witnessed in FMCG, Healthcare and Metal stocks. The top gainers from the F&O segment were South Indian Bank, GMR Infrastructure and DLF. On the other hand, the top losers were InterGlobe Aviation, Hindustan Zinc and Max Financial Services. In the index option segment, maximum OI continues to be seen in the 9000-9600 calls and 8500-9200 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 1.18% and reached 11.42. The 50-share Nifty was down by 17 points or 0.19% to settle at 9,119.40.
Nifty April 2017 futures closed at 9127.00 on Friday at a premium of 7.60 points over spot closing of 9119.40, while Nifty May 2017 futures ended at 9151.25, at a premium of 31.85 points over spot closing. Nifty April futures saw a contraction of 0.88 million (mn) units, taking the total outstanding open interest (OI) to 18.64 million (mn) units. The near month derivatives contract will expire on April 27, 2017.
From the most active contracts, Reliance Industries April 2017 futures traded at a discount of 0.9 points at 1404.10 compared with spot closing of 1,405.00. The numbers of contracts traded were 37,709.
DLF April 2017 futures traded at a premium of 0.10 points at 183.35 compared with spot closing of 183.25. The numbers of contracts traded were 34,192.
HDFC Bank April 2017 futures traded at a discount of 3.8 points at 1494.90 compared with spot closing of 1,498.70. The numbers of contracts traded were 33,566.
Axis Bank April 2017 futures traded at a discount of 0.25 point at 485.75 compared with spot closing of 486.00. The numbers of contracts traded were 15,640.
ICICI Bank April 2017 futures traded at a premium of 0.05 points at 269.10 compared with spot closing of 269.05. The numbers of contracts traded were 14,962.
Among Nifty calls, 9200 SP from the April month expiry was the most active call with an addition of 0.96 million open interests. Among Nifty puts, 9100 SP from the April month expiry was the most active put with a contraction of 0.87 million open interests. The maximum OI outstanding for Calls was at 9200 SP (6.12 mn) and that for Puts was at 9100 SP (5.03 mn). The respective Support and Resistance levels of Nifty are: Resistance 9172.45--- Pivot Point 9130.60--- Support --- 9077.55.
The Nifty Put Call Ratio (PCR) finally stood at 1.06 for April month contract. The top five scrips with highest PCR on OI were BOSCH (2.06), United Breweries (1.69), DHFL (1.21), Sun TV (1.14) and TVS Motor (1.14).
Among most active underlying, Reliance Industries witnessed a contraction of 1.47 million units of Open Interest in the April month futures contract, followed by DLF witnessing a contraction of 1.76 million units of Open Interest in the April month contract, HDFC Bank witnessed an addition of 1.15 million units of Open Interest in the April month contract, Yes Bank witnessed a contraction of 0.01 million units of Open Interest in the April month future contract and Sun TV Network witnessed a contraction of 0.23 million units of Open Interest in the April month future contract.