Nifty continues bullish run, reclaims 11,600 mark

23 Sep 2019 Evaluate

CNX Nifty continued its bull run for second straight session and finished the wonderful day of trade with gains of around three percent on Monday, supported by government's decision to cut corporate tax rate. Traders’ mood remained up-beat with Finance Minister Nirmala Sitharaman’s statement that India has become a highly competitive investment destination post corporate tax reduction as the rates are now lower than that in China and most Southeast Asian countries. After getting a gap-up start, benchmark equity index continued its north-ward journey throughout the day supported with the report that Niti Aayog Vice Chairman Rajiv Kumar’s statement that Rs 1.45-lakh crore tax giveaway is unlikely to widen fiscal deficit much as the shortfall will be met through increased tax collections due to higher growth which the massive tax cuts are expected to achieve. Besides, the all-powerful GST Council slashed tax rates on hotel tariffs and some goods with a view to addressing sectoral concerns and spur growth.

Traders remained enthusiastic with Union Minster Piyush Goyal’s statement that the target of making India $5 trillion economy is achievable and that all the stakeholders need to work together to meet this objective. Adding some optimism, Reserve Bank of India (RBI) has relaxed the priority-sector lending (PSL) rules for exporters, scrapping the turnover limit for an exporter to be eligible for such loans and increasing the sanction limit per borrower.

Most of the NSE sectoral indices ended in green, except IT and Pharma. The top gainers from the F&O segment Escorts, Bharat Petroleum Corporation and NCC. On the other hand, the top losers were Zee Entertainment Enterprises, Reliance Capital and Petronet LNG. In the index option segment, maximum OI continues to be seen in the 11400 - 11,800 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 increased by 9.04% and reached 16.79.The 50 share Nifty was up by 326.00 points or 2.89% to settle at 11,600.20.

Among, Nifty calls, 11,600 SP from the September month expiry was the most active call with an addition of 1.23 million open interests. Among Nifty puts, 11,500 from the September month expiry was the most active put with an addition of 2.03 million open interests. The maximum OI outstanding for Calls was at 11,600 SP (3.09 mn) and that for Puts was at 11,000 SP (4.42 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,706.25 -- Pivot Point 11,588.80 -- Support -- 11,482.75.

The Nifty Put Call Ratio (PCR) finally stood at 1.48 for September month contract. The top five scrips with highest PCR on Bosch (2.80), Shree Cement (2.00), Muthoot Finance (1.80), Sun TV Network (1.57) and Godrej Consumer Products (1.54).

Among most active underlying, State Bank of India witnessed an addition of 8.68 million units of Open Interest in the September month futures contract, followed by Housing Development Finance Corporation witnessing an addition of 2.26 million units of Open Interest in the September month contract, Reliance Industries witnessed an addition of 4.94 million units of Open Interest in the September month contract, Axis Bank witnessed an addition of 5.86 million units of Open Interest in the September month contract and ICICI Bank witnessed an addition of 7.49 million units of Open Interest in the September month future contract.

Nifty continues bullish run, reclaims 11,600 mark

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