Nifty ends slightly higher; holds 11,050 mark

Market saw trend reversal in the last leg of the session as NSE gauge -- Nifty50 -- gave up most of its early gains to end the Monday’s session near equator amid profit booking. Market made optimistic start, as traders were encouraged with Fitch Solutions’ statement that the RBI is expected to cut interest rates by 40 basis points before the end of the current financial year as monetary easing till now appears to be insufficient in boosting economic growth. Some support also came with Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that the business community has been facing various challenges at the moment and growth is a matter of highest priority for the monetary policy committee (MPC) of the central bank.

Index continued its gaining momentum in the afternoon deals to reach at fresh intraday high point, as buying further crept in with a report that monsoon rains in India in the week through August 14 were above average for a third straight week. The cumulative rainfall till August 14 was 0.1% above long-term average with the weekly rainfall 45.1% above long-term average owing to heavy rainfall across western and central India. Sentiments was also buoyed on a report that private equity and venture capital investments in India crossed $8 billion in July -- the highest fund infusion in a month by PE/VC funds -- amid strong investment activity in infrastructure and real estate asset classes. However, market erased most of its early gains, as anxiety was among traders with report that the Australia and New Zealand Banking Group (ANZ) slashed its forecast for India's economic growth to 6.2% in the financial year ending next March from a previous estimate of 6.5%, warning it would be tough for authorities to engineer a turnaround.

Traders were seen piling up positions in IT, Media and Metal, while selling was witnessed in Bank, Auto and Financial services. The top gainers from the F&O segment were IDBI Bank, Dewan Housing Finance Corporation and PVR. On the other hand, the top losers were Vodafone Idea, Reliance Capital and Biocon. 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 0.60 and reached 16.74.The 50 share Nifty was up by 6.10 points or 0.06% to settle at 11,053.90.

Nifty August 2019 futures closed at 11058.10 on Monday, at a premium of 4.20 points over spot closing of 11053.90, while Nifty September 2019 futures ended at 11102.50, at a premium of 48.60 points over spot closing. Nifty August futures saw a contraction of 0.38 million (mn) units, taking the total outstanding open interest (OI) to 17.87 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 discount of 0.50 points at 76.30 compared with spot closing of 76.80. The numbers of contracts traded were 40,557.

Indiabulls Housing Finance August 2019 futures traded at a discount of 10.35 points at 523.25 compared with spot closing of 533.60. The numbers of contracts traded were 27,323.

Reliance Industries August 2019 futures traded at a premium of 3.95 points at 1293.95 compared with spot closing of 1290.00. The numbers of contracts traded were 22,060.

Sun Pharmaceutical Industries August 2019 futures traded at a discount of 3.35 points at 422.65 compared with spot closing of 426.00. The numbers of contracts traded were 18,625.

State Bank of India August 2019 futures traded at a premium of 0.50 points at 287.05 compared with spot closing of 286.55. The numbers of contracts traded were 17,923.

Among, Nifty calls, 11,200 SP from the August month expiry was the most active call with an addition of 0.008 million open interests. Among Nifty puts, 11000 from the August month expiry was the most active put with a contraction of 0.13 million open interests. The maximum OI outstanding for Calls was at 11500 SP (2.71 mn) and that for Puts was at 11,000 SP (3.76 mn). The respective Support and Resistance levels of Nifty are: Resistance  11,121.25--Pivot Point  11,079.55--Support--11,012.20 .

The Nifty Put Call Ratio (PCR) finally stood at 1.13 for August month contract. The top five scrips with highest PCR on Oracle Financial Services Software (2.00), Asian Paints (1.52), Hindustan Unilever (1.42), Godrej Consumer Products(1.34), Century Textile and Industries (1.32).

Among most active underlying, Reliance Industries witnessed a contraction of 0.62 million units of Open Interest in the August month futures contract, followed by State Bank of India witnessing an addition of 1.09 million units of Open Interest in the August month contract, Axis Bank witnessed an addition of 2.23 million units of Open Interest in the August month contract, HDFC witnessed a contraction of 2.35 million units of Open Interest in the August month contract and HDFC Bank witnessed a contraction of 0.03 million units of Open Interest in the August month future contract.