Bears take control over market; Nifty hits fresh 5-months low

Bears struck back with a bang on Thursday and NSE gauge -- Nifty50 -- ended the day’s trade with a cut of over a percentage point weighed down by sharp selling in frontline counters. Market begun day on a muted note, on the back of weak economic data. The government data showed that growth of eight core industries dropped to 0.2 per cent in June mainly due to a contraction in oil-related sectors as well as in cement production. The eight core sector industries - coal, crude oil, natural gas, refinery products, fertilizer, steel, cement and electricity - had expanded by 7.8 per cent in June last year. Traders remained anxious after the Controller General of Accounts (CGA) data showing that the government's fiscal deficit touched Rs 4.32 trillion for the June quarter, which is 61.4 per cent of the budget estimate for 2019-20 fiscal. In absolute terms, the fiscal deficit, the gap between expenditure and revenue, was Rs 4.32 trillion at June-end.

Market further extended losses in the afternoon deals, as sentiment on the street weakened with a report, as traders’ sentiments got hit after CRISIL sliced its estimate of India's gross domestic product (GDP) growth by 20 basis points to 6.9 per cent for the current fiscal 2019-20 following a triangulation of downside risks: weak monsoon, slowing global growth and sluggish high-frequency data for the first quarter. Traders remain concerned with a private report that the Centre’s net tax receipts (NTR) in Q1 were just 14.7% of the FY20 target (BE), with annual growth of a mere 6%. This is even as annual NTR growth required to meet the BE is a daunting 29.5%. However, in dying hour of trade, the market managed to trim some of their initial losses, as traders found some solace with a report that the Nikkei Manufacturing Purchasing Managers' Index, which rose to 52.5 in July from June's 52.1. It has remained above the 50-mark separating contraction from growth for two years.

Most of the NSE sectoral indices ended in red, except Auto. The top gainers from the F&O segment were Ujjivan Financial Services, Reliance Infrastructure and Voltas. On the other hand, the top losers were Dish TV India, Vedanta and JSW Steel.In the index option segment, maximum OI continues to be seen in the 11,400 - 11,600 calls and 10,900 -11,100 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 7.12 and reached 14.55.The 50 share Nifty was down by 138.00 points or 1.24% to settle at 10,980.00.

Among, Nifty calls, 11,300 SP from the August month expiry was the most active call with a contraction of 0.19 million open interests. Among Nifty puts, 11,000 from the August month expiry was the most active put with an addition of 0.37 million open interests. The maximum OI outstanding for Calls was at 11500 SP (2.07 mn) and that for Puts was at 11,000 SP (3.66 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,077.50 -- Pivot Point 10,979.25 -- Support -- 10,881.75.

The Nifty Put Call Ratio (PCR) finally stood at 1.13 for August month contract. The top five scrips with highest PCR on Bosch (10.75), Hindustan Zinc (1.95) Siemens (1.65), Page Industries (1.57), Century Textile and Industries (1.51).

Among most active underlying, State Bank of India witnessed an addition of 13.46 million units of Open Interest in the August month futures contract, followed by Reliance Industries witnessing an addition of 1.65 million units of Open Interest in the August month contract, ICICI Bank witnessed an addition of 2.34 million units of Open Interest in the August month contract, Axis Bank witnessed an addition of 2.98 million units of Open Interest in the August month contract and Maruti Suzuki India witnessed an addition of 0.10 million units of Open Interest in the August month future contract.