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Nifty witnesses breather after two days of contineous rally

24 Sep 2019 Evaluate

In a volatile trading session, S&P CNX Nifty snapped the Tuesday’s trade slightly in red. After making a cautious start, index traded slightly in green with NITI Aayog vice chairman Rajiv Kumar’s statement that India has become a more attractive investment destination following the reduction in corporate tax rates but relocation of units from competitors such as China will depend on other factors as well, such as the ability of states to make their environment more business-friendly. He added that this measure would help restore growth momentum in the second half of the economy. He expects the second half of FY20 (October 2019-March 2020) to clock higher than 7.5% GDP growth.

But, the sentiments turned pessimistic with West Bengal Finance Minister Amit Mitra’s statement that the current slowdown in the economy is due to ‘structural’ changes and not ‘cyclical’. He added the structural changes have been ushered in due to demonetisation and ‘faulty’ GST implementation along with the collapse of IL&FS which crippled the NBFC sector. Adding some concerns, former Union finance minister Yashwant Sinha’s statement that contraction in demand and reluctance to invest led to the current slowdown in the Indian economy. He said some corporates are sitting on a pile of cash, but are not making investments, thus affecting demand.

Most of the NSE sectoral indices ended in RED, except FMGC, IT and Pharma. The top gainers from the F&O segment IDBI Bank, DHFL and Muthoot Finance. On the other hand, the top losers were Sun TV Network, Engineers India and NCC. 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 decreased by 0.36% and reached 16.73.The 50 share Nifty was down by 12.00 points or 0.10% to settle at 11,588.20.

Among, Nifty calls, 11,700 SP from the September month expiry was the most active call with an addition of 0.73 million open interests. Among Nifty puts, 11,500 from the September month expiry was the most active put with an addition of 0.90 million open interests. The maximum OI outstanding for Calls was at 11,700 SP (2.82 mn) and that for Puts was at 11,000 SP (4.04 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,649.10 -- Pivot Point 11,594.15 -- Support -- 11,533.25.

The Nifty Put Call Ratio (PCR) finally stood at 1.47 for September month contract. The top five scrips with highest PCR on Muthoot Finance (1.81), Godrej Consumer Products (1.58), Shree Cement (1.57), RBL Bank (1.56) and Cholamandalam Investment and Fin Co (1.46).

Among most active underlying, Reliance Industries witnessed an addition of 2.91 million units of Open Interest in the September month futures contract, followed by State Bank of India witnessing an addition of 4.53 million units of Open Interest in the September month contract, HDFC Bank witnessed an addition of 2.69 million units of Open Interest in the September month contract, Axis Bank witnessed an addition of 0.26 million units of Open Interest in the September month contract and Maruti Suzuki India witnessed an addition of 0.44 million units of Open Interest in the September month future contract. 

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