Nifty end higher on hopes of FPI tax rollback

Erasing all of their losses, NSE gauge -- Nifty50 ended the day’s trade in positive territory. Markets made a sluggish start with the report that Chief Economic Adviser (CEA) Krishnamurthy Subramanian virtually ruled out a major stimulus package for the economy, saying profit is private, losses are public is not good economics. Cautiousness also crept in as the International Monetary Fund (IMF) raised questions regarding the NDA government’s revenue targets in the light of the below-trend revenue collections amid the worsening slowdown in the broader economy. Sentiments also remain dampened with credit rating agency ICRA estimating India’s gross domestic product (GDP) growth rate at 5.5-6 percent in the first quarter (April-June) of the fiscal year 2019-20.

However, market pared all of their initial losses and entered into green terrain in middle of the trade with report that government is likely to sign off on FPI surcharges rollback soon. Market extended their gains to end near intraday high point, as traders turned optimistic with Niti Aayog Vice Chairman Rajiv Kumar’s statement that the government is considering a number of measures which will be taken at an appropriate time to deal with financial stress and unleash animal spirit in the economy.

All the NSE sectoral indices ended in green except FMCG, Pvt Bank and Bank. The top gainers from the F&O segment were NBCC (India), Vodafone Idea and Reliance Capital. On the other hand, the top losers were Marico, L&T Finance Holdings and IndusInd Bank. In the index option segment, maximum OI continues to be seen in the 10,900 - 11,200 calls and 10,600- 10,800 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 2.83 and reached 17.34.The 50 share Nifty was up by 88.00 points or 0.82% to settle at 10,829.35.

Nifty August 2019 futures closed at 10842.70 on Friday, at a premium of 13.35 points over spot closing of 10829.35, while Nifty September 2019 futures ended at 10880.70, at a premium of 51.35 points over spot closing. Nifty August futures saw a contraction of 0.86 million (mn) units, taking the total outstanding open interest (OI) to 18.11 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 0.15 points at 59.30 compared with spot closing of 59.45. The numbers of contracts traded were 65,695.

ICICI Bank August 2019 futures traded at a discount of 0.05 points at 395.85 compared with spot closing of 395.90. The numbers of contracts traded were 44,906.

Reliance Industries August 2019 futures traded at a discount of 0.95 points at 1275.05 compared with spot closing of 1276.00. The numbers of contracts traded were 37,487.

Indiabulls Housing Finance August 2019 futures traded at a premium of 0.60 points at 467.60 compared with spot closing of 467.00. The numbers of contracts traded were 30,825.

HDFC Bank August 2019 futures traded at a premium of 3.80 points at 2168.70 compared with spot closing of 2164.90. The numbers of contracts traded were 29,904.  Among, Nifty calls, 10,900 SP from the August month expiry was the most active call with a contraction of 0.13 million open interests. Among Nifty puts, 10,700 from the August month expiry was the most active put with a contraction of 0.25 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.60 mn) and that for Puts was at 10,500 SP (2.59 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,915.55 -- Pivot Point 10,776.35 -- Support -- 10,690.15.

The Nifty Put Call Ratio (PCR) finally stood at 0.87 for August month contract. The top five scrips with highest PCR on Bosch (0.88), Oil India (0.86), Sun TV (0.84), Tata Global Beverages (0.79) and BajajAuto (0.78).

Among most active underlying, Reliance Industries witnessed a contraction of 2.82 million units of Open Interest in the August month futures contract, followed by State Bank of India witnessing a contraction of 3.08 million units of Open Interest in the August month contract, ICICI Bank witnessed an addition of 0.79 million units of Open Interest in the August month contract, Bajaj Finance witnessed a contraction of 0.21 million units of Open Interest in the August month contract and Maruti Suzuki India witnessed a contraction of 0.08 million units of Open Interest in the August month future contract.