NSE gauge -- Nifty50 -- gave powerful performance by surging over five percent on Friday after Finance Minister Nirmala Sitharaman proposed to slash corporate tax for domestic companies and new domestic manufacturing companies. The current corporate tax rate is 30%, which has been brought down to 22%. For new manufacturing companies the existing tax rate is 25% which has been brought down to 15%. After making a cautious start, market traded with marginal gains, as traders took some support with Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that there is room for rate cut as the growth has slowed down. The policy objective of the monetary policy is to maintain price stability, keeping in mind the objective of growth. Separately, Das expressed the hope that the ongoing crisis in Saudi Arabia that has spiked crude prices to multi-year highs will have limited impact on inflation and fiscal numbers.
Soon, trade brought some more cheer to the market and touched its intraday high, aided with Commerce minister Piyush Goyal’s statement that he hopes the tax relief measures announced by the government for the corporates will give the necessary fillip to growth that has been sputtering for long. Local sentiments also got buttressed with Reserve Bank governor Shaktikanta Das exuding confidence that second-quarter GDP numbers will be better than the previous one as the government has started spending again. Sentiments also remained up-beat with the report that Union Home Minister Amit Shah said that the Modi government is committed in making India a big manufacturing hub and the slashing of corporate tax rates would make the country's markets much more exciting for potential investors.
All the NSE sectoral indices ended in green, except IT. The top gainers from the F&O segment NCC, Page Industries and Yes Bank. On the other hand, the top losers were Dewan Housing Finance Corporation, Just Dial and Zee Entertainment Enterprises. In the index option segment, maximum OI continues to be seen in the 10,800 -11,300 calls and 10,700 - 11,200 puts indicating this is the trading range expectation.
India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 0.96% and reached 15.40.The 50 share Nifty was up by 569.40 points or 5.32% to settle at 11,274.20.
Among, Nifty calls, 11,300 SP from the September month expiry was the most active call with an addition of 1.16 million open interests. Among Nifty puts, 10,800 from the September month expiry was the most active put with an addition of 0.71 million open interests. The maximum OI outstanding for Calls was at 11,200 SP (3.04 mn) and that for Puts was at 11,000 SP (4.97 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,540.40 -- Pivot Point 11,115.70 -- Support -- 10,849.50.
The Nifty Put Call Ratio (PCR) finally stood at 1.31 for September month contract. The top five scrips with highest PCR on Shree Cement (5.00), Godrej Consumer Products (1.70), Muthoot Finance (1.52), Bosch (1.49) and Titan company (1.46).
Among most active underlying, State Bank of India witnessed an addition of 4.48 million units of Open Interest in the September month futures contract, followed by Reliance Industries witnessing an addition of 0.79 million units of Open Interest in the September month contract, Axis Bank witnessed an addition of 9.42 million units of Open Interest in the September month contract, Maruti Suzuki India witnessed an addition of 0.26 million units of Open Interest in the September month contract and HDFC Bank witnessed an addition of 3.87 million units of Open Interest in the September month future contract.
