Bears take control over the Indian equity market and Nifty snapped the day’s trade below its crucial 10,750 level with a huge cut of about one and half percentage point after the government remained non-committal on the stimulus package to boost the economy. The day began on a cautious note, as traders remained negative with Care Ratings’ report that the ongoing economic slowdown has started hurting corporates as well, with companies reporting a sharp decline in both revenue and profit growth numbers in the June quarter. India Inc.’s net sales growth for the June quarter slid to 4.6% as against 13.5% for the same period last year, while the net profit growth moderated to 6.6% as compared to last year's 24.6%. Sentiment on the street weakened on a private report which stated that the government’s net revenue growth from direct taxes has decelerated sharply to 4.7% for April 1-August 15 this year as against a required annual growth rate of 17.3%, reflecting lower buoyancy in the wake of an overall slowdown in the economy.
Selling got intensified during the last leg of the trade and local barometer ended the trading session at intraday low level, as sentiments remained deeply negative with a private report showing that the unemployment in India has shot up to a 3-year high of 8.3 per cent, as on August 20. With the urban unemployment rate close to 10%, job seekers in the urban areas are suffering more than those in the rural areas. Market participants also took note of a report that Chief economic advisor K Subramanian called for a ‘mindset change’ in the private sector by desisting from the tendency to grab profit and socialise losses and also seek sops in times of stress. He also said it will be only investment and not consumption that will help the economy grow.
All the NSE sectoral indices ended in red, except IT. The top gainers from the F&O segment were Tata Power Company, Divi's Laboratories and Oracle Financial Services Software. On the other hand, the top losers were Reliance Capital, DLF and Yes Bank. In the index option segment, maximum OI continues to be seen in the 10,900 - 11,200 calls and 10,900- 11,200 puts indicating this is the trading range expectation.
India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 4.88 and reached 17.85.The 50 share Nifty was down by 177.35 points or 1.62% to settle at 10,741.35.
Nifty August 2019 futures closed at 10732.10 on Thursday, at a discount of 9.25 points over spot closing of 10741.35, while Nifty September 2019 futures ended at 10771.90, at a premium of 30.55 points over spot closing. Nifty August futures saw an addition of 0.05 million (mn) units, taking the total outstanding open interest (OI) to 18.97 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 0.90 points at 56.55 compared with spot closing of 57.45. The numbers of contracts traded were 83,633.
DLF August 2019 futures traded at a premium of 1.25 points at 144.30 compared with spot closing of 143.05. The numbers of contracts traded were 52,493.
Indiabulls Housing Finance August 2019 futures traded at a discount of 11.50 points at 447.00 compared with spot closing of 458.50. The numbers of contracts traded were 39,951.
Reliance Industries August 2019 futures traded at a premium of 1.65 points at 1245.85 compared with spot closing of 1244.20. The numbers of contracts traded were 27,250.
Maruti Suzuki India August 2019 futures traded at a discount of 34.05 points at 6163.95 compared with spot closing of 6198.00. The numbers of contracts traded were 26,456.
Among, Nifty calls, 11,000 SP from the August month expiry was the most active call with an addition of 1.16 million open interests. Among Nifty puts, 10,800 from the August month expiry was the most active put with a contraction of 0.41 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.50 mn) and that for Puts was at 11,000 SP (2.74 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,857.90 --Pivot Point 10,788.10--Support--10,667.95.
The Nifty Put Call Ratio (PCR) finally stood at 0.83 for August month contract. The top five scrips with highest PCR on Asian Paints (1.44), Hindustan Unilever (1.42), Berger Paints India (1.28), Godrej Consumer Products(1.20) and Hindustan Zinc (1.17).
Among most active underlying, Reliance Industries witnessed a contraction of 2.02 million units of Open Interest in the August month futures contract, followed by State Bank of India witnessing a contraction of 2.95 million units of Open Interest in the August month contract, DLF witnessed a contraction of 0.21 million units of Open Interest in the August month contract, Maruti Suzuki India witnessed an addition of 0.04 million units of Open Interest in the August month contract and Bajaj Finance witnessed a contraction of 0.16 million units of Open Interest in the August month future contract.
