Nifty starts new series on optimistic note

After falling in previous six straight sessions, domestic index Nifty heaved a sigh of relief on first day of new F&O series with gains of over quarter percentage point on Friday. Nifty made a cautious start tracking feeble global cues. Traders remain concerned with private report that despite heavy buying by foreign investors in the last month of 2018-19 (FY19), foreign portfolio investors remained net sellers of $5.5 billion in the market. An announcement of increase in surcharge on the super-rich in the Union Budget FY20 has weighed on portfolio investors and witnessed outflows, especially in the equity segment. Besides, a private report showed that India Inc.'s deal activity in the first six months of this year encompassing both M&A and private equity transactions, stood at $32.1 billion, down 57 per cent over last year.

However, market reversed early weakness to trade in positive range, as investors' turned encouraged with Niti Aayog CEO Amitabh Kant’s statement that India was pursuing a policy of import substitution so far, and in future, the country's policy will essentially focus on export-led growth. He said India has huge potential to become a global manufacturing hub for electronics products. Some solace also came in with the Employees' State Insurance Corporation (ESIC) payroll data showing that around 12.66 lakh jobs were created in May, a tad higher than 11.15 lakh jobs in April this year.

Most of the NSE sectoral indices ended in green, except IT. The top gainers from the F&O segment were Yes Bank, IDFC First Bank and Reliance Capital. On the other hand, the top losers were Vedanta, Vodafone Idea and PVR.In the index option segment, maximum OI continues to be seen in the 11,300 11,800 calls and 11,100 11,500 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 3.98 and reached 12.13.The 50 share Nifty was up by 32.15 points or 0.29% to settle at 11,284.30.

Nifty August 2019 futures closed at 11327.00 on Friday, at a premium of 42.70 points over spot closing of 11284.30, while Nifty September 2019 futures ended at 11377.25, at a premium of 92.95 points over spot closing. Nifty August futures saw a contraction of 0.26 million (mn) units, taking the total outstanding open interest (OI) to 16.86 mn units. The near month derivatives contract will expire on August 29, 2019.

From the most active contracts, Yes Bank August 2019 futures traded at a premium of 1.10 points at 96.70 compared with spot closing of 95.60. The numbers of contracts traded were 59,793.

Maruti Suzuki India August 2019 futures traded at a discount of 54.80 points at 5765.20 compared with spot closing of 5820.00. The numbers of contracts traded were 57,444.

Bajaj Finance August 2019 futures traded at a premium of 3.05 points at 3275.05 compared with spot closing of 3272.00. The numbers of contracts traded were 46,544.

Tata Motors August 2019 futures traded at a discount of 0.30 points at 147.90 compared with spot closing of 148.20. The numbers of contracts traded were 36,584.

Reliance Industries August 2019 futures traded at a discount of 2.90 points at 1214.10 compared with spot closing of 1217.00. The numbers of contracts traded were 35,872.

Among, Nifty calls, 11,500 SP from the August month expiry was the most active call with an addition of 0.002 million open interests. Among Nifty puts, 11,300 from the August month expiry was the most active put with an addition of 0.26 million open interests. The maximum OI outstanding for Calls was at 12000 SP (1.40 mn) and that for Puts was at 11,000 SP (2.92 mn). The respective Support and Resistance levels of Nifty are: Resistance  11,324.5 -- Pivot Point 11,267.32 -- Support--11,227.03.

The Nifty Put Call Ratio (PCR) finally stood at 1.34 for August month contract. The top five scrips with highest PCR on Siemens (2.62), Hindustan Zinc (2.57), Godrej Consumer Products (2.51), Mahanagar Gas (2.47), Cummins India (2.00).

Among most active underlying, Bajaj Finance witnessed a contraction of 0.02 million units of Open Interest in the August month futures contract, followed by Maruti Suzuki India witnessed an addition of 0.39 million units of Open Interest in the August month contract, Reliance Industries witnessed an addition of 0.85 million units of Open Interest in the August month contract, Tata Motors witnessed an addition of 0.36 million units of Open Interest in the August month contract and State Bank of India witnessed an addition of 0.58 million units of Open Interest in the August month future contract.