Steep selloff drags Nifty below 11,600 mark

Snapping its three days winning streak, key benchmark Nifty ended the day’s trade in red terrain below its crucial 11,600 level. Market made a negative start, as some concerns came with Asian Development Bank lowering India's Gross Domestic Product (GDP) growth forecast to 7 per cent for the current year on the back of fiscal shortfall concerns. Sentiment also remained negative with the India Meteorological Department’s (IMD) statement that the country’s monsoon rains were 20 per cent below average in the week ending on July 17, as rainfall was scanty over the central, western and southern parts of the country. It also raised concerns over the output of summer-sown crops. Monsoon rains are crucial for farm output and economic growth, as about 55 per cent of India's arable land is rain-fed, and agriculture forms about 15 per cent of a $2.5 trillion economy that is the third biggest in Asia.

Local barometer gauge added losses and touched its intraday low point in last hour of trade, as traders remained anxious after the International Monetary Fund (IMF), which has warned that the US-China trade war could cost the global economy about $455 billion next year, said recent trade policy actions were weighing on global trade flows, eroding confidence, and disrupting investment. Adding pessimism, a private report said that terminating India’s position as a beneficiary country under the Generalised System of Preference (GSP) will not only negatively impact export of goods from India to the US, but will also have adverse after-effects for American companies operating in India as their additional tax burden will grow by an additional $300 million every year.

All sectoral indices ended in red except Media and Fin Service on NSE. The top gainers from the F&O segment were Dish TV India, Colgate Palmolive (India) and Wipro. On the other hand, the top losers were Yes Bank, MindTree and Bharat Electronics. 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 0.42 and reached 11.75.The 50 share Nifty was down by 90.60 points or 0.78% to settle at 11,596.90.

Nifty July 2019 futures closed at 11604.35 on Thursday, at a premium of 7.45 points over spot closing of 11596.90, while Nifty August 2019 futures ended at 11647.60, at a premium of 50.70 points over spot closing. Nifty July futures saw a contraction of 0.05 million (mn) units, taking the total outstanding open interest (OI) to 15.59 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 0.00 points at 85.90 compared with spot closing of 85.90. The numbers of contracts traded were 79,975.

Maruti Suzuki India July 2019 futures traded at a discount of 2.30 points at 5872.70 compared with spot closing of 5875.00. The numbers of contracts traded were 24,520.

MindTree July 2019 futures traded at a premium of 1.25 points at 691.95 compared with spot closing of 690.70. The numbers of contracts traded were 23,841.

Reliance Industries July 2019 futures traded at a premium of 0.40 points at 1265.30 compared with spot closing of 1264.90. The numbers of contracts traded were 21,608.

HDFC Bank July 2019 futures traded at a discount of 1.80 points at 2412.95 compared with spot closing of 2414.75. The numbers of contracts traded were 20,503.

Among, Nifty calls, 11,700 SP from the July month expiry was the most active call with an addition of 1.30 million open interests. Among Nifty puts, 11,600 from the July month expiry was the most active put with an addition of 0.03 million open interests. The maximum OI outstanding for Calls was at 12000 SP (3.47 mn) and that for Puts was at 11,300 SP (2.60 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,655.23 -- Pivot Point 11,618.82 -- Support -- 11,560.48.

The Nifty Put Call Ratio (PCR) finally stood at 0.93 for July month contract. The top five scrips with highest PCR on Page Industries (2.77), Bosch (2.10), Infosys (1.90), HDFC (1.20) and Mahanagar Gas (1.12).

Among most active underlying, State Bank of India witnessed a contraction of 0.55 million units of Open Interest in the July month futures contract, followed by Yes Bank witnessed an addition  of 10.34 million units of Open Interest in the July month contract, HDFC witnessed a contraction of 0.30 million units of Open Interest in the July month contract, Maruti Suzuki India witnessed a contraction of 0.10 million units of Open Interest in the July month contract and Reliance Industries  witnessed a contraction of 0.87 million units of Open Interest in the July month future contract.