Sell-Off in Nifty triggered by P-Note Regulation & OI Sell Data

Stock Market Today by Shailesh Saraf – 20th May 2019

Indian Market Outlook:

The SEBI, in a meeting at 2 pm IST yesterday finalized the KYC norms for the P-Note participants which triggered the selloff of 100 points. FED interest rate most likely to be hiked from 25 bps to 50 bps in the scheduled June 15 FED meeting, further confirmation will come if 3 month US treasury yield trades above 36 bps. Open interest data shows 2 times the average sells in options yesterday.

The open interest data, SEBI's P-Note decision along with FED rate hike expectation in June 15 might put further selling pressure in Nifty. However, the short term trend would be sell only if Small Cap trades below 5090. Nifty is opening 12 points gap up at 7790 from yesterday's close of 7778 at 8:15 am IST.

 

International Market Outlook

The greenback, still 3 percent lower on the year, has risen this week against most currencies after Fed officials said in their meeting minutes that they could raise rates as early as June. New York Fed President William Dudley reaffirmed that view Thursday when he said the Fed could hike rates in June or July if economic data improves as expected. Brexit, or the British vote on whether to remain in the European Union, is one reason economists think the Fed could put off its rate hike until after June. The Brexit vote is June 23, about a week after the Fed meets.

 

Open Interest-FII & Pro Combined Activity

 
Open Interest-FII & Pro combined Activity

On 29th April FII & Pro combined had a total long position in Index Futures of 8582325 shares which is reduced to only 864900 shares as on 19 May, i.e. a total sell of 8036175 shares in current expiry.

Similarly, in Index options, FII and Pro combined have increased their short positions from 19668150 shares to 36465375 shares, i.e. a total sell of 20426475 shares in current expiry.

The data indicates a clear sell bias in the markets by FIIs and Proprietary.

 

Change in Options Open Interest Today

 
Change in options Open Interest Today

Today, FII have reduced 710550 shares long and added 960000 shares short positions in Index Call option, net sell 1670550 shares today. In puts, FII have added 719775 shares long and increased short positions by 595350 shares, net PUT buy 124425 shares today.

Pro, have reduced 226425 shares long and increased short position by 4077075 shares, a net sell of 4303500 shares in Index Call Option Today. In Puts, Pro has increased long position by 157650 shares and reduced short position by 1607250 shares, a net buy of 1764900 shares in Put today.

 

FII Derivatives Statistics

The FII derivatives statistics data published by NSE shows that there has been net selling of 4774 contracts in Index Futures by FIIs which is worth 294 crores. However, In Index options, the data shows that FIIs are net short 20615 contracts which is worth 1240 crores. The data is misinterpreted generally since there has been a net sell worth Rs. 1400 cr (approx) in the options market as shown in the table below. FIIs are net short in calls, which is SELL in the market, and they are net buyer in the Puts which is also SELL for the markets. Hence instead of taking the difference of call and put we need to sum up both which gives a net sell worth 1400 Cr in Index Options.

 

FII Derivatives statistics - NSE

 

FII Options Statistics - Dynamic Research

FII Options Statistics - Dynamic Research

 

FII Index Statistics - Dynamic Research

FII Index Statistics - Dynamic Research

 

Major Events of the Day

Indian: Quarterly results today:   MUNJALSHOW, ALLCARGO, BRITANNIA,ECLERX, KTKBANK, ITC, BANKINDIA, JUSTDIAL, IDBI, PRAJIND, ABRILANUVO
.
 

FII Index Future Buy /Sell activity

 
FII & DII Cash Buy/Sell Activity

As on 18th May, for Current Expiry, FII have sold Rs. 563 crores worth shares along with DII who have bought shares worth Rs.4809 crores in the cash segment.

Today, FII have sold equity worth 765 cr and DII bought worth 1483 cr.

 

*Top Price Gainers:

PEL : Piramal Enterprises has decided to demerge its healthcare and financial services businesses to grow unrelated divisions separately, marking an important turn in legacy of the diversified conglomerate. Including today's gains, shares of Ajay Piramal-promoted company have rallied 21.5 per cent in four sessions after the company declared its March quarter results.

Top Price Gainers
 

*Top Price Losers:

MEGHMANI ORGANICS has rallied more than 100% from low of Rs. 19.8 it made in march and made high of Rs. 46 today, the stock has corrected 16% on profit booking. Stock is currently trading at Rs. 36.75 and major support as per Dynamic levels is at Rs. 37. This is a multibagger stock as per Dynamic levels.

Top Price Losers
 

*Top Volume Buzzers:

DISHMAN: Dishman declared Q4 result today net profit increased from 16.11 to 23.19 QoQ, up by 43%, and revenue increased by 10% QoQ on standalone basis. On Consolidated basis Net profit increased by 42.5% YoY.

Top Volume Buzzers
 

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