Bears made comeback on the Indian equity market and NSE gauge -- Nifty50 -- snapped first day of the week below its crucial 10,900 level with a cut of over a percentage points as the escalating tensions concerning Jammu & Kashmir and the trade dispute between China and the US dampened investors’ sentiments. Domestic market kick-started the day on a negative note as traders remained cautious as Foreign investors have withdrawn a net amount of Rs 2,881 crore from the Indian capital markets in the first two sessions of August on account of domestic as well as global headwinds. According to latest depository’s data, FPIs pulled out a net sum of Rs 2,632.58 crore from equities and Rs 248.52 crore from the debt segment during August 1-2, taking the cumulative net outflow to Rs 2,881.10 crore. Selling further crept in as the Federation of Automobile Dealers Associations (FADA) feared that the job cuts may continue across automobile dealerships with more showrooms being shut in the near future and sought immediate government intervention such as reduction of GST to provide relief to the auto industry.
Barometer pared some of its losses in the second half of the trade, as investors took some solace with former RBI Governor Bimal Jalan’s statement that the current slowdown in the Indian economy is cyclical and growth will pick up in one or two years. Some support also came in with a monthly survey showed the country’s services sector activity in July returned to growth territory driven by new business orders that rose at fastest pace since October 2016, following which job creation picked up. The IHS Markit India Services Business Activity Index rose to 53.8 in July from 49.6 in June, pointed to the quickest increase in output in one year.
Most of the NSE sectoral indices ended in red, except IT. The top gainers from the F&O segment were Bharti Airtel, Bata India and Nestle India. On the other hand, the top losers were NBCC (India), DHFL and Equitas Holdings. In the index option segment, maximum OI continues to be seen in the 10,900 - 11,100 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 9.20 and reached 16.58.The 50 share Nifty was down by 134.75 points or 1.23% to settle at 10,862.60.
Nifty August 2019 futures closed at 10896.80 on Monday, at a premium of 34.20 points over spot closing of 10862.60, while Nifty September 2019 futures ended at 10948.35, at a premium of 85.75 points over spot closing. Nifty August futures saw an addition of 0.73 million (mn) units, taking the total outstanding open interest (OI) to 19.89 mn units. The near month derivatives contract will expire on August 29, 2019.
From the most active contracts, Reliance Industries August 2019 futures traded at a premium of 6.10 points at 1147.10 compared with spot closing of 1141.00. The numbers of contracts traded were 43,478.
Yes Bank August 2019 futures traded at a premium of 0.20 points at 81.25 compared with spot closing of 81.05. The numbers of contracts traded were 40,756.
State Bank of India August 2019 futures traded at a premium of 2.20 points at 302.00 compared with spot closing of 299.80. The numbers of contracts traded were 37,727.
Indiabulls Housing Finance August 2019 futures traded at a discount of 8.50 points at 467.95 compared with spot closing of 476.45. The numbers of contracts traded were 30,054.
HDFC Bank August 2019 futures traded at a premium of 18.45 points at 2193.05 compared with spot closing of 2174.60. The numbers of contracts traded were 29,839.
Among, Nifty calls, 11,000 SP from the August month expiry was the most active call with an addition of 0.52 million open interests. Among Nifty puts, 10800 from the August month expiry was the most active put with an addition of 0.19 million open interests. The maximum OI outstanding for Calls was at 11000 SP (2.22 mn) and that for Puts was at 11,000 SP (3.01 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,911.40--Pivot Point 10,847.00--Support--10,798.20.
The Nifty Put Call Ratio (PCR) finally stood at 1.04 for August month contract. The top five scrips with highest PCR on Bosch (10.40), Hindustan Zinc (1.96) Siemens (1.55), Century Textile and Industries (1.52), Cummins India (1.33).
Among most active underlying, State Bank of India witnessed an addition of 54,36,000 million units of Open Interest in the August month futures contract, followed by Reliance Industries witnessing an addition of 5,70,000 million units of Open Interest in the August month contract, ICICI Bank witnessed an addition of 19,78,625 million units of Open Interest in the August month contract, Housing Development Finance Corporation witnessed an addition of 10,57,000 million units of Open Interest in the August month contract and HDFC Bank witnessed an addition of 11,87,000 million units of Open Interest in the August month future contract.
