After getting onto a negative start, NSE gauge -- Nifty50 -- erased all their losses to the end almost flat, as investors awaited corporate results for the April to June quarter of current financial year for further cues. It was a negative start to the Indian market, as traders remained cautious with CARE Ratings’ report that economic slowdown has begun to dent the credit profile of India Inc. There has been deterioration in the credit quality of entities rated in the first quarter of the current financial year, showing effect of the prevailing slowdown in the Indian economy. It added that the credit rating downgrades have been largely on account of liquidity pressure leading to, at times, delays in debt servicing, high debt levels, weakening profit margins, decline in scale of operations. Sentiments remained pessimistic with a private report that India’s decision to raise duties on gasoline and diesel is unlikely to threaten the inflation outlook, keeping alive expectations of more interest rate cuts from the central bank.
But, buying in last leg of trade helped market to reverse most of the losses, as traders found some support with the Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement the financial system is hugely surplus with liquidity and this would facilitate the better transmission of rate cuts implemented by the RBI. Some solace also came with Union minister Nitin Gadkari stating that innovative funding modules are on the anvil for the ambitious Rs 7.5-lakh-crore highway building programme as the sector can help achieve government’s dream of making India a $5 trillion economy.
All sectoral indices ended in red on NSE except Realty, Pharma and PSU Bank. The top gainers from the F&O segment were Adani Power, Oil India and IOC. On the other hand, the top losers were REC, Titan Company and Dewan Housing Finance Corporation. 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 decreased by 1.19 and reached 13.68. The 50-share Nifty was down by 2.70 points or 0.02% to settle at 11,555.90.
Nifty July 2019 futures closed at 11552.60 on Tuesday, at a discount of 3.30 points over spot closing of 11555.90, while Nifty August 2019 futures ended at 11616.65, at a premium of 60.75 points over spot closing. Nifty July futures saw an addition of 0.46 million (mn) units, taking the total outstanding open interest (OI) to 18.60 mn units. The near month derivatives contract will expire on August 29, 2019.
From the most active contracts, Bajaj Finance July 2019 futures traded at a premium of 6.90 points at 3610.90 compared with spot closing of 3604.00. The numbers of contracts traded were 45,378.
Yes Bank July 2019 futures traded at a discount of 0.45 points at 91.75 compared with spot closing of 92.20. The numbers of contracts traded were 44,777.
Titan Company July 2019 futures traded at a premium of 4.10 points at 1103.10 compared with spot closing of 1099.00. The numbers of contracts traded were 44,031.
Reliance Industries July 2019 futures traded at a discount of 2.40 points at 1280.60 compared with spot closing of 1283.00. The numbers of contracts traded were 30,030.
Tata Consultancy Services July 2019 futures traded at a premium of 7.40 points at 2127.40 compared with spot closing of 2120.00. The numbers of contracts traded were 28,534.
Among Nifty calls, 11,700 SP from the July month expiry was the most active call with an addition of 0.03 million open interests. Among Nifty puts, 11,500 from the July month expiry was the most active put with an addition of 0.17 million open interests. The maximum OI outstanding for Calls was at 12,000 SP (3.12 mn) and that for Puts was at 11,300 SP (1.75 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,605.30 -- Pivot Point 11,533.15 -- Support -- 11,483.75.
The Nifty Put Call Ratio (PCR) finally stood at 0.90 for July month contract. The top five scrips with highest PCR on Page Industries (5.50), Bosch (3.33), Mahanagar Gas (1.41), Godrej Consumer Products (1.25) and Birlasoft (1.10)
Among most active underlying, Titan witnessed an addition of 1.76 million units of Open Interest in the July month futures contract, followed by Bajaj Finance witnessing an addition of 0.06 million units of Open Interest in the July month contract, Tata Consultancy Services witnessed an addition of 0.50 million units of Open Interest in the July month contract, Reliance Industries witnessed a contraction of 1.38 million units of Open Interest in the July month contract and State Bank of India witnessed a contraction of 1.40 million units of Open Interest in the July month future contract.
