Nifty witness bloodbath; slumps over 250 points

Bears continued to hold their control over the Indian equity market and NSE gauge -- Nifty50 -- snapped first day of the week below its crucial 11,600 level with a huge cut of about two percentage points as uncertainty in global markets spooked sentiment. Domestic market kick-started the day on a negative note as traders remained cautious with report that foreign institutional investors (FIIs) sold shares worth Rs 89 crore on a net basis in the cash market, while domestic institutional investors (DIIs) bought shares worth Rs 276 crore. Adding to the pessimism, India Meteorological Department data showed that monsoon has covered almost the entire country, but three-fourths of MeT department’s sub-meteorological divisions still fall under the ‘deficient’ rainfall category.

Local barometer gauges added losses and reached intraday low point in last hour of trade, as sentiments on the street weakened further with Moody's stating that there are risks of India missing 3.3 percent fiscal deficit target for the current financial year if tax revenue falls short of the projection. The Budget 2019-20 lowered fiscal deficit projection for the current financial year to 3.3 percent from 3.4 percent targeted in the Interim Budget 2019-20 in February. Traders failed to get any sense of relief with S&P Global Ratings statement that the proposed Rs 70,000-crore capital infusion into public sector banks (PSBs) will provide a timely booster to these lenders. It said the move, announced in the Budget, is likely to be credit positive for the banking sector and the economy.

All sectoral indices ended in red on NSE. The top gainers from the F&O segment were Yes Bank, Cummins India and HCL Technologies. On the other hand, the top losers were Punjab National Bank, MindTree and Bank of India. In the index option segment, maximum OI continues to be seen in the 11,900-12,100 calls and 11,200-11,400 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 6.03 and reached 13.85. The 50-share Nifty was down by 252.55 points or 2.14% to settle at 11,558.60.

Nifty July 2019 futures closed at 11566.30 on Monday, at a premium of 7.70 points over spot closing of 11558.60, while Nifty August 2019 futures ended at 11635.65, at a premium of 77.05 points over spot closing. Nifty July futures saw an addition of 0.09 million (mn) units, taking the total outstanding open interest (OI) to 18.15 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 0.25 points at 93.60 compared with spot closing of 93.35. The numbers of contracts traded were 59,195.

Bajaj Finance July 2019 futures traded at a discount of 0.80 points at 3429.20 compared with spot closing of 3430.00. The numbers of contracts traded were 36,705.

Maruti Suzuki India July 2019 futures traded at a premium of 14.50 points at 6067.35 compared with spot closing of 6052.85. The numbers of contracts traded were 29,503.

State Bank of India July 2019 futures traded at a premium of 1.10 points at 357.00 compared with spot closing of 355.90. The numbers of contracts traded were 26,280.

Indiabulls Housing Finance July 2019 futures traded at a premium of 0.65 points at 691.15 compared with spot closing of 690.50. The numbers of contracts traded were 25,722.

Among Nifty calls, 12,000 SP from the July month expiry was the most active call with an addition of 0.59 million open interests. Among Nifty puts, 11,600 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 (2.90 mn) and that for Puts was at 13,000 SP (1.57 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,712.57 -- Pivot Point 11,617.93 -- Support -- 11,463.97.

The Nifty Put Call Ratio (PCR) finally stood at 0.94 for July month contract. The top five scrips with highest PCR on OI were Page Industries (10.40), Bosch (3.17), NIIT Technologies (1.86), Mahanagar Gas (1.38) and Godrej Consumer Products (1.24).

Among most active underlying, State Bank of India witnessed a contraction of 2.06 million units of Open Interest in the July month futures contract, followed by Bajaj Finance witnessing a contraction of 0.09 million units of Open Interest in the July month contract, Maruti Suzuki India witnessed an addition of 0.06 million units of Open Interest in the July month contract, Reliance Industries witnessed an addition of 0.38 million units of Open Interest in the July month contract and Axis Bank witnessed an addition of 0.44 million units of Open Interest in the July month future contract.