First day of new F&O series turned out to be a cautious and ended the day’s trade with a cut of around half a percent, weighed down by selling in frontline counters. An index made a slightly positive start but soon lost momentum, as traders remain concerned about a report that India’s monsoon rains were below average for the fourth straight week, with rainfall scanty over central and western parts of the country in the week ended on June 26, raising concerns about major crop production and the impact on the nation's economy. Some pessimism also spread among the investors with Governor Shaktikanta Das calling for more cooperation between the government and the Reserve Bank to help boost the sagging growth engine and to ensure systemic stability. A dip in consumption and private investment has exerted pressure on the fiscal math.
Market further extended losses in the afternoon deals, as sentiments on the street weakened further after the Directorate General of GST intelligence (DGGI) detected good and services tax (GST) evasion amounting to Rs 300 crore across Nagpur zone, which includes Vidarbha, Marathwada and Nasik regions of Maharashtra. Traders ignored Reserve Bank of India’s (RBI’s) Financial Stability Report (FSR) that the financial system remains stable despite some dislocation of late. It said the proportion of commercial lenders' non-performing assets (NPAs) may fall slightly to 9% by March, but recommended that the vigil on non-banking finance companies (NBFCs) continues.
All sectoral indices ended in red on NSE except PSU Bank, Realty and FMCG stocks. The top gainers from the F&O segment were Union Bank of India, ICICI Prudential Life Insurance Company and Apollo Hospitals Enterprise. On the other hand, the top losers were Dewan Housing Finance Corporation, Reliance Infrastructure and Reliance Capital. 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 increased by 2.10 and reached 14.95. The 50-share Nifty was down by 52.70 points or 0.45% to settle at 11,788.85.
Nifty July 2019 futures closed at 11841.50 on Friday, at a premium of 52.65 points over spot closing of 11788.85, while Nifty August 2019 futures ended at 11904.40, at a premium of 115.55 points over spot closing. Nifty July futures saw an addition of 0.09 million (mn) units, taking the total outstanding open interest (OI) to 18.48 mn units. The near month derivatives contract will expire on August 29, 2019.
From the most active contracts, Yes Bank July 2019 futures traded at a premium of 0.70 points at 109.20 compared with spot closing of 108.50. The numbers of contracts traded were 29,092.
Reliance Industries July 2019 futures traded at a premium of 8.50 points at 1262.50 compared with spot closing of 1254.00. The numbers of contracts traded were 25,075.
State Bank of India July 2019 futures traded at a premium of 0.15 points at 362.95 compared with spot closing of 362.80. The numbers of contracts traded were 22,207.
Indiabulls Housing Finance July 2019 futures traded at a premium of 4.05 points at 611.05 compared with spot closing of 607.00. The numbers of contracts traded were 19,621.
ICICI Bank July 2019 futures traded at a premium of 2.30 points at 439.00 compared with spot closing of 436.70. The numbers of contracts traded were 18,391.
Among Nifty calls, 12,000 SP from the July month expiry was the most active call with an addition of 0.25 million open interests. Among Nifty puts, 11,800 from the July month expiry was the most active put with an addition of 0.08 million open interests. The maximum OI outstanding for Calls was at 12,000 SP (1.44 mn) and that for Puts was at 11,500 SP (1.55 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,848.53 -- Pivot Point 11,812.02 -- Support -- 11,752.33.
The Nifty Put Call Ratio (PCR) finally stood at 1.19 for July month contract. The top five scrips with highest PCR on OI were Page Industries (5.00), Bosch (2.50), Mahanagar Gas (2.00), Tata Motor DVR (1.45) and Max Financial Services (1.44).
Among most active underlying, State Bank of India witnessed a contraction of 1.50 million units of Open Interest in the July month futures contract, followed by Reliance Industries witnessing an addition of 0.94 million units of Open Interest in the July month contract, Axis Bank witnessed a contraction of 0.24 million units of Open Interest in the July month contract, ICICI Bank witnessed a contraction of 0.25 million units of Open Interest in the July month contract and Maruti Suzuki India witnessed an addition of 0.03 million units of Open Interest in the July month future contract.
