Nifty closes volatile day in green; above 11,650 mark

The benchmark index Nifty closed in green terrain after a volatile day of trade on Wednesday. Nifty ended the session above its crucial 11,650 level to clock in a third consecutive session of gains. Initially, the Indian benchmark made a small positive start, as traders took some solace with Finance Minister Nirmala Sitharaman’s statement that total bad loans of commercial banks declined by Rs 1.02 lakh crore to Rs 9.34 lakh crore in the 2018-19 fiscal on the back of steps taken by the government. The government has instituted a comprehensive 4R’s strategy for recognition of non-performing assets (NPAs) transparently, resolution and recovery of value from stressed assets, recapitalising of public sector banks (PSBs) and reforms in PSBs so as to reduce their bad loans.

Domestic sentiment was buoyed on Trump administration’s report stating that there is an ‘enormous potential’ for growth in the India-United States (US) relationship. They also exuded confidence that the ongoing trade issues could be worked through because of the friendship between the two nations. However, further gains remained capped as some anxiety spread among traders with Chief Economic Advisor K V Subramanian’s statement that there is a need to tap foreign capital to accelerate growth from the current level of 7 per cent to 8 per cent. He added that achieving $5-trillion economy by 2024-25 is possible although the goal is slightly stretched.

All sectoral indices ended in green except Auto and Pharma on NSE. The top gainers from the F&O segment were Dewan Housing Finance Corporation, Equitas Holdings and Multi Commodity Exchange of India. On the other hand, the top losers were Tata Elxsi, Yes Bank and Strides Pharma Science. 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 2.08 and reached 11.80.The 50 share Nifty was up by 24.90 points or 0.21% to settle at 11,687.50.

Nifty July 2019 futures closed at 11675.80 on Wednesday, at a discount of 11.70 points over spot closing of 11687.50, while Nifty August 2019 futures ended at 11720.35, at a premium of 32.85 points over spot closing. Nifty July futures saw a contraction of 0.73 million (mn) units, taking the total outstanding open interest (OI) to 15.64 mn units. The near month derivatives contract will expire on July 25, 2019.

From the most active contracts, Yes Bank July 2019 futures traded at a premium of 0.15 points at 98.55 compared with spot closing of 98.40. The numbers of contracts traded were 79,403.

Tata Elxsi July 2019 futures traded at a premium of 2.95 points at 744.95 compared with spot closing of 742.00. The numbers of contracts traded were 29,406.

IndusInd Bank July 2019 futures traded at a premium of 0.50 points at 1504.50 compared with spot closing of 1504.00. The numbers of contracts traded were 25,467.

Kotak Mahindra Bank July 2019 futures traded at a discount of 3.30 points at 1529.35 compared with spot closing of 1532.65. The numbers of contracts traded were 19,540.

State Bank of India July 2019 futures traded at a discount of 0.90 points at 372.10 compared with spot closing of 373.00. The numbers of contracts traded were 18,924.

Among, Nifty calls, 11,700 SP from the July month expiry was the most active call with an addition of 0.005 million open interests. Among Nifty puts, 11,600 from the July month expiry was the most active put with an addition of 0.44 million open interests. The maximum OI outstanding for Calls was at 12,000 SP (3.23 mn) and that for Puts was at 11,600 SP (2.53 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,712.38 -- Pivot Point 11,681.77 -- Support-- 11,656.88.

The Nifty Put Call Ratio (PCR) finally stood at 1.05 for July month contract. The top five scrips with highest PCR on Page Industries (2.85), Bosch (2.10), Infosys (1.91), Sun Pharmaceutical Industries (1.17) and Colgate-Palmolive India (1.09).

Among most active underlying, State Bank of India witnessed an addition of 3.45 million units of Open Interest in the July month futures contract, followed by Yes Bank witnessed a contraction of 5.36 million units of Open Interest in the July month contract, IndusInd Bank witnessed a contraction of 0.49 million units of Open Interest in the July month contract, Infosys witnessed a contraction of 0.73 million units of Open Interest in the July month contract and Tata Elxsi witnessed a contraction of 0.82 million units of Open Interest in the July month future contract.