Late buying helps Nifty to end in green terrain

After witnessing bloodbath in the first half, domestic benchmark CNX S&P Nifty recouped from early losses to end the day’s trade with marginal gain amid recovery in Auto and IT stocks. Investors remained anxious with the World Bank report showing that India has now taken a backseat to be the seventh largest economy globally with UK and France now ahead of it. As per the data, India grew to $2.73 trillion economy in 2018. In 2017, the country stood at the fifth spot with its size at $2.65 trillion. Domestic sentiments got hit with National Securities Depository’s (NSDL) report that foreign portfolio investments in Indian equity market saw a major dip in the month of July. FPI pullout from equity stood at a 9-month high of over Rs 12,000 crore in July. Traders took note of a report that the overall goods and services tax (GST) collections in July came in at Rs 1.02 lakh crore, a bit higher than Rs 99,939 crore collected in June, but significantly lower than Rs 1.13 lakh crore garnered in April.

However, market reversed early weakness to trade in positive range in late session, as traders found solace with the India Meteorological Department’s statement that monsoon is expected to be normal in August and September. Quantitatively, the rainfall across the country as a whole during the two-month period is likely to be 100 per cent of the Long Period Average (LPA) with a model error of plus or minus 8 per cent.  Some comfort also came with S&P Global Ratings’ report that India is a relatively closed economy and is less reliant on manufacturing for growth which explains why it continues to perform well. It is currently on a soft path but it will outperform in relative terms.

Traders were seen piling up positions in Auto, IT and Financial service stocks, while selling was witnessed in Metal, Media and PSU Bank. The top gainers from the F&O segment were Bharti Airtel, Pidilite Industries and Biocon. On the other hand, the top losers were Indiabulls Housing Finance, Jindal Steel & Power and Ashok Leyland. In the index option segment, maximum OI continues to be seen in the 11,300 -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 4.33 and reached 15.18.The 50 share Nifty was up by 17.35 points or 0.16% to settle at 10,997.35.

Nifty August 2019 futures closed at 11024.05 on Friday, at a premium of 26.70 points over spot closing of 10997.35, while Nifty September 2019 futures ended at 11074.25, at a premium of 76.90 points over spot closing. Nifty August futures saw an addition of 0.14 million (mn) units, taking the total outstanding open interest (OI) to 19.15 mn units. The near month derivatives contract will expire on August 29, 2019.

From the most active contracts, State Bank of India August 2019 futures traded at a premium of 2.45 points at 310.40 compared with spot closing of 307.95. The numbers of contracts traded were 65,130.

ICICI Bank August 2019 futures traded at a premium of 1.65 points at 412.65 compared with spot closing of 411.00. The numbers of contracts traded were 38,845.

HDFC Bank August 2019 futures traded at a premium of 4.60 points at 2224.60 compared with spot closing of 2220.00. The numbers of contracts traded were 38,598.

Reliance Industries August 2019 futures traded at a premium of 4.35 points at 1187.90 compared with spot closing of 1183.55. The numbers of contracts traded were 35,938.

Yes Bank August 2019 futures traded at a premium of 0.40 points at 88.55 compared with spot closing of 88.15. The numbers of contracts traded were 35,718.

Among, Nifty calls, 11,200 SP from the August month expiry was the most active call with a contraction of 0.18 million open interests. Among Nifty puts, 11,000 from the August month expiry was the most active put with an addition of 0.07 million open interests. The maximum OI outstanding for Calls was at 11500 SP (2.22 mn) and that for Puts was at 11,000 SP (3.48 mn). The respective Support and Resistance levels of Nifty are: Resistance  11,102.02--Pivot Point  10,975.48--Support--10,870.82.

The Nifty Put Call Ratio (PCR) finally stood at 1.18 for August month contract. The top five scrips with highest PCR on Bosch (9.00), Hindustan Zinc (1.83) Siemens (1.62), Century Textile and Industries (1.43), Cummins India (1.27).

Among most active underlying, State Bank of India witnessed an addition of 6.84 million units of Open Interest in the August month futures contract, followed by Reliance Industries witnessing an addition of 0.78 million units of Open Interest in the August month contract, Housing Development Finance Corporation witnessed an addition of 0.54 million units of Open Interest in the August month contract, ICICI Bank witnessed an addition of 5.12 million units of Open Interest in the August month contract and Bajaj Finance witnessed a contraction of 0.13 million units of Open Interest in the August month future contract.