After altering between the green and red territory near its crucial 11,900 mark for most part of the day’s trade, domestic benchmark CNX S&P Nifty snapped the session tad above the neutral line on Wednesday. Market made a cautious start and traded flat, amid sharp fall in crude oil prices. Some pessimism came with the finance minister’s statement that India's state-owned banks had classified Rs 1.50 trillion ($21.76 billion) worth of loans as wilful defaults in 2018-19, with the biggest lender State Bank of India accounting for nearly a third. However, some buying crept in as traders found some support with Finance Minister Nirmala Sitharaman’s statement that India still continues to be the fastest growing economy and demonetisation has had no effect on the Indian economy. Market participants were also taking some comfort with Agriculture Minister Narendra Singh Tomar’s statement that there was 'no cause of concern' about monsoon following the latest IMD estimate, but the government is keeping a close watch on it. He said that the sowing of kharif (summer) crops like paddy will pick up as the IMD estimates good rains in the coming months.
However, gains got trimmed as the market came under some selling pressure in fag-end trading, as anxiety remained among the traders with a monthly survey showed the country’s services sector activity in June contracted for the first time since May 2018 as weak sales, competitive pressures and unfavourable taxation hampered output. The IHS Markit India Services Business Activity Index fell to 49.6 in June, down from 50.2 in May, as broadly stagnant sales caused the first drop in business activity in over a year. Investors took note of report that the apex NBFC body Finance Industry Development Council (FIDC) said they should be allowed to avail of refinance facility under the Mudra scheme and also setting up of a permanent refinance window at RBI similar to the one that National Housing Bank (NHB) offers them to help meet their liquidity needs.
Traders were seen piling up positions in PSU Bank, Media and Realty stocks, while selling was witnessed in IT, Pharma and Auto. The top gainers from the F&O segment were Dewan Housing Finance Corporation, Indiabulls Housing Finance and Dish TV India. On the other hand, the top losers were Indraprastha Gas, Eicher Motors and United Spirits. In the index option segment, maximum OI continues to be seen in the 11,900-12,100 calls and 11,700-11,900 puts indicating this is the trading range expectation.
India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 0.70 and reached 13.54. The 50-share Nifty was up by 6.45 points or 0.05% to settle at 11,916.75.
Nifty July 2019 futures closed at 11949.20 on Wednesday, at a premium of 32.45 points over spot closing of 11916.75, while Nifty August 2019 futures ended at 12014.90, at a premium of 98.15 points over spot closing. Nifty July futures saw a contraction of 0.12 million (mn) units, taking the total outstanding open interest (OI) to 17.99 mn units. The near month derivatives contract will expire on August 29, 2019.
From the most active contracts, Indiabulls Housing Finance July 2019 futures traded at a premium of 4.45 points at 695.05 compared with spot closing of 690.60. The numbers of contracts traded were 37,934.
Yes Bank July 2019 futures traded at a premium of 0.65 points at 100.45 compared with spot closing of 99.80. The numbers of contracts traded were 35,204.
IndusInd Bank July 2019 futures traded at a premium of 0.30 points at 1473.30 compared with spot closing of 1473.00. The numbers of contracts traded were 21,724.
Reliance Industries July 2019 futures traded at a premium of 5.60 points at 1287.60 compared with spot closing of 1282.00. The numbers of contracts traded were 14,941.
ICICI Bank July 2019 futures traded at a premium of 2.25 points at 437.80 compared with spot closing of 435.55. The numbers of contracts traded were 12,725.
Among Nifty calls, 12,000 SP from the July month expiry was the most active call with an addition of 1.06 million open interests. Among Nifty puts, 11,900 from the July month expiry was the most active put with an addition of 0.38 million open interests. The maximum OI outstanding for Calls was at 12,000 SP (3.55 mn) and that for Puts was at 11,800 SP (2.45 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,945.62 ---- Pivot Point 11,916.33 --- Support --- 11,887.47.
The Nifty Put Call Ratio (PCR) finally stood at 1.17 for July month contract. The top five scrips with highest PCR on OI were Bosch (2.40), Page Industries (2.25), Mahanagar Gas (1.40), Strides Pharma Science (1.37) and Tata Motor DVR (1.28).
Among most active underlying, Indiabulls Housing Finance witnessed an addition of 1.16 million units of Open Interest in the July month futures contract, followed by State Bank of India witnessing a contraction of 0.46 million units of Open Interest in the July month contract, IndusInd Bank witnessed a contraction of 0.24 million units of Open Interest in the July month contract, Reliance Industries witnessed a contraction of 0.59 million units of Open Interest in the July month contract and Yes Bank witnessed an addition of 0.34 million units of Open Interest in the July month future contract.
