Local benchmark S&P CNX Nifty snapped the day’s trade in the red as weak global cues added to domestic woes to intensify selling. Traders remained concerned in the absence of any announcement about a government fiscal stimulus package and ahead of key inflation data. Initially index made a cautious start, as traders remain pessimistic about government data showing that India's factory output growth, measured by the Index of Industrial Production (IIP), slowed down for second straight month to 2.0% in June 2019 as compared to 7% in June 2018 and it is also lower than 3.1% in May 2019. The slowdown was mainly due to poor performance of the manufacturing and mining sectors and a contraction in the capital goods and consumer durables sectors. However, market trim some of the losses, taking comfort from a report that the government is working on a set of measures to remove friction points in the economy with a view to ensuring easy availability of funds to productive sectors and stimulate overall growth.
However, sharp selling in last leg of trade mainly played spoil sports for the market to touch intraday low points, as traders reacted negatively to a private report that the Reserve Bank of India is unlikely to vote in favour of overseas sovereign bonds at its meeting with the government. The central bank is concerned that signals by overseas bonds could disrupt local bonds, which are controlled by the RBI. Domestic sentiments also got hit with a report that foreign portfolio investors (FPIs) withdrew a net amount of Rs 11,134.60 from equities while pumping in Rs 1,937.54 into the debt segment during August 1-9, taking the total net withdrawal to Rs 9,197.06 crore.
All the NSE sectoral indices ended in red. The top gainers from the F&O segment were Indiabulls Housing Finance, Reliance Industries and Sun Pharmaceutical Industries. On the other hand, the top losers were Bharat Heavy Electricals, Yes Bank and Motherson Sumi Systems. In the index option segment, maximum OI continues to be seen in the 10900 - 11,200 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 12.20 and reached 17.77.The 50 share Nifty was down by 183.80 points or 1.65% to settle at 10,925.85.
Nifty August 2019 futures closed at 10925.15 on Tuesday, at a discount of 0.70 points over spot closing of 10925.85, while Nifty September 2019 futures ended at 10972.20, at a premium of 46.35 points over spot closing. Nifty August futures saw a contraction of 0.21 million (mn) units, taking the total outstanding open interest (OI) to 17.65 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 2.60 points at 1277.90 compared with spot closing of 1275.30. The numbers of contracts traded were 1,32,503.
Yes Bank August 2019 futures traded at a discount of 0.80 points at 72.40 compared with spot closing of 73.20. The numbers of contracts traded were 79,167.
Indiabulls Housing Finance August 2019 futures traded at a discount of 42.45 points at 534.85 compared with spot closing of 577.30. The numbers of contracts traded were 53,396.
Sun Pharmaceutical Industries August 2019 futures traded at a discount of 2.75 points at 435.60 compared with spot closing of 438.35. The numbers of contracts traded were 32,430.
HDFC Bank August 2019 futures traded at a discount of 9.30 points at 2218.70 compared with spot closing of 2228.00. The numbers of contracts traded were 25,968.
Among, Nifty calls, 11,200 SP from the August month expiry was the most active call with an addition of 0.34 million open interests. Among Nifty puts, 11000 from the August month expiry was the most active put with an addition of 0.06 million open interests. The maximum OI outstanding for Calls was at 11000 SP (2.57 mn) and that for Puts was at 11,000 SP (3.38 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,080.63-- Pivot Point 10,991.12 --Support --10,836.33.
The Nifty Put Call Ratio (PCR) finally stood at 1.09 for August month contract. The top five scrips with highest PCR on Hindustan Zinc (1.71), Hindustan Unilever (1.43), Godrej Consumer Products (1.39), Asian Paints (1.39), Century Textile and Industries (1.36).
Among most active underlying, Reliance Industries witnessed a contraction of 1.84 million units of Open Interest in the August month futures contract, followed by State Bank of India witnessing an addition of 2.31 million units of Open Interest in the August month contract, Indiabulls Housing Finance witnessed an addition of 2.31 million units of Open Interest in the August month contract, Sun Pharmaceutical Industries witnessed an addition of 1.85 million units of Open Interest in the August month contract and HDFC Bank witnessed an addition of 0.12 million units of Open Interest in the August month future contract.
