Late sell-off drags Nifty marginally lower

Selloff in the last leg of trade dragged Nifty below its crucial 11,850 mark and the benchmark index ended session with minor cut. Market made positive start as traders took some comfort with Arvind Panagariya’s statement that the escalating trade war between the US and China is an opportune time for India to attract the large multinationals looking for alternative locations outside the Communist country. Some additional support came after with a private report that the government can look at issuing infrastructure bonds via a special purpose vehicle (SPV), which could mop up over Rs 95,000 crore or 0.5 percent of GDP, as it looks for means to push growth.

As the day progressed the barometer added to early gains and surged to register day’s highs at afternoon deals, taking support from the department for promotion of industry and internal trade's (DPIIT) Secretary Ramesh Abhishek’s statement that National Retail Policy will streamline the retail trade in India and is poised to provide the ease of doing business, which may be to the advantage of both traders and Indian economy. However, traders booked profits in the dying hour of trade as some anxiety persisted with a report that the cumulative debt of the National Highway Authority of India (NHAI) has mounted to Rs 1.78 lakh crore in FY19 from around Rs 40,000 crore in FY14. The borrowing is expected to go up to Rs 3.31 lakh crore by FY23.

Traders were seen piling up positions in Realty, Auto and Fin Service stocks, while selling was witnessed in IT, Metal and Media. The top gainers from the F&O segment were Tata Motors- DVR, Dish TV India and The Federal Bank. On the other hand, the top losers were IFCI, PC Jeweller and Wockhardt. In the index option segment, maximum OI continues to be seen in the 11,900-12,100 calls and 11,400-11,600 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 0.71 and reached 14.64. The 50-share Nifty was down by 6.00 points or 0.05% to settle at 11,841.55.

Nifty July 2019 futures closed at 11908.85 on Thursday, at a premium of 67.30 points over spot closing of 11841.55, while Nifty August 2019 futures ended at 11977.35, at a premium of 135.80 points over spot closing.  Nifty July futures saw an addition of 6.71 million (mn) units, taking the total outstanding open interest (OI) to 18.38 mn units. The near month derivatives contract will expire on August 29, 2019.

From the most active contracts, Reliance Industries July 2019 futures traded at a premium of 7.60 points at 1283.60 compared with spot closing of 1276.00. The numbers of contracts traded were 36,231.

HDFC Bank July 2019 futures traded at a premium of 19.85 points at 2480.45 compared with spot closing of 2460.60. The numbers of contracts traded were 31,385.

Axis Bank July 2019 futures traded at a premium of 1.65 points at 802.15 compared with spot closing of 800.50. The numbers of contracts traded were 25,954.

ICICI Bank July 2019 futures traded at a premium of 1.75 points at 441.05 compared with spot closing of 439.30. The numbers of contracts traded were 25,585.

Yes Bank July 2019 futures traded at a premium of 0.50 points at 113.00 compared with spot closing of 112.50. The numbers of contracts traded were 23,892.

Among Nifty calls, 12,000 SP from the July month expiry was the most active call with an addition of 0.14 million open interests. Among Nifty puts, 11,800 from the July month expiry was the most active put with an addition of 0.33 million open interests. The maximum OI outstanding for Calls was at 12,000 SP (1.19 mn) and that for Puts was at 11,500 SP (1.30 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,894.78 -- Pivot Point 11,857.92 -- Support -- 11,804.68.

The Nifty Put Call Ratio (PCR) finally stood at 1.15 for July month contract. The top five scrips with highest PCR on OI were IDBI Bank (4.38), Bosch (3.50), Mahanagar Gas (1.86), Oil India (1.60) and Godrej Consumer Products (1.59).

Among  most  active  underlying,  State  Bank  of  India  witnessed  an  addition  of  13.94  million  units  of  Open  Interest  in  the  July  month  futures  contract,  followed  by  Axis  Bank  witnessing  an  addition  of  9.32  million  units  of  Open  Interest  in  the  July  month  contract,  Reliance  Industries  witnessed  an  addition  of  10.23  million  units  of  Open  Interest  in  the  July  month  contract,  HDFC  Bank  witnessed  a  contraction  of  2.57  million  units  of  Open  Interest  in  the  July  month  contract  and  Maruti  Suzuki  India  witnessed  an  addition  of  0.76  million  units  of  Open  Interest  in  the  July  month  future  contract.