Nifty tumbles below 11,450 mark

25 Sep 2019 Evaluate

Indian equity benchmark Nifty extended losses for the second straight session on Wednesday and ended the day below psychological level of 11450. Market made a negative start, as traders remained cautious with the Asian Development Bank (ADB) sharply cutting India's growth forecast to 6.5% for the current fiscal, weighed down by the GDP growth rate dipping to a six-year low in the first quarter. Market continued to trade lower in second half as rating agency ICRA said though domestic apparel exports are expected to remain in the positive zone during rest of the year, there are multiple threats looming which could slow down the pace and make it challenging for exporters. Traders failed to get relief with RBI Governor Shaktikanta Das’ statement that the government's recent move to slash corporate tax rate made India a very attractive destination for foreign investment. He said India's corporate tax now becomes very competitive compared to other emerging market economies in ASEAN and other parts of Asia.

Selling got intensified in the last leg of the trade, as sentiment on the street weakened further with the report that India's fiscal deficit gap is set to increase by at least 70 basis points to 4 percent of the gross domestic product (GDP) for 2019-20 after Finance Minister Nirmala Sitharaman announced a cut in corporate tax rates on September 20.

All the sectoral indices ended in red on the NSE except IT. The top gainers from the F&O segment were IDBI Bank, Power Grid Corporation of India and Container Corporation of India. On the other hand, the top losers were Arvind, Dish TV India and State Bank of India. 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 3.36% and reached 16.17. The 50 share Nifty was down by 148.00 points or 1.28% to settle at 11,440.20.

Among, Nifty calls, 11,500 SP from the September month expiry was the most active call with an addition of 0.58 million open interests. Among Nifty puts, 11,600 from the September month expiry was the most active put with an addition of 0.75 million open interests. The maximum OI outstanding for Calls was at 11,500 SP (3.51 mn) and that for Puts was at 10,800 SP (2.87 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,531.40 -- Pivot Point 11,473.75 -- Support -- 11,382.55.

The Nifty Put Call Ratio (PCR) finally stood at 1.23 for September month contract. The top five scrips with highest PCR on Shree Cement (2.00), Muthoot Finance (1.63), Cholamandalam Investment and Fin (1.53), Godrej Consumer Products (1.52) and SUNTV (1.46).

Among most active underlying, State Bank of India witnessed an addition of 15.25 million units of Open Interest in the September month futures contract, followed by Reliance Industries witnessing an addition of 5.09 million units of Open Interest in the September month contract, Axis Bank witnessed an addition of 12.67 million units of Open Interest in the September month contract, Maruti Suzuki India witnessed an addition of 0.33 million units of Open Interest in the September month contract and Bajaj Finance witnessed an addition of 0.58 million units of Open Interest in the September month future contract.

Nifty tumbles below 11,450 mark

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