Nifty edges lower; ends below 11,550 mark

27 Sep 2019 Evaluate

Key equity benchmark -- Nifty -- ended the volatile day of trade with a cut of half a percent on Friday. Index made a cautions start and traded slightly in green, as traders took some support with the report that Union Finance Minister Nirmala hoped the economy will start looking up in the second half of the current financial year as consumption rises and banks increase their lending operations. She also said private sector banks were not facing any liquidity crisis while exuding confidence that demand would return and motivate the economy to move at a faster rate. But market lost its gains and turned into red, as sentiments got undermined with Fitch Ratings’ statement that the steep cut in tax paid by companies may stimulate investments and economic growth only in the medium term, but it will lead to breach fiscal targets in the current fiscal itself. It expects India to miss its fiscal deficit target of 3.3% of GDP for the current financial year by about 40 basis points following last week's decision to reduce corporate tax rates, resulting in the loss of an estimated Rs 1.45 trillion in tax revenue. Market continued its weak trade for the further part of the day, despite IHS Markit’s report stating that the steepest ever cut in tax that companies pay will improve relative competitiveness of India and should help boost corporate investment over the medium-term.

All NSE sectoral indices ended in red. The top gainers from the F&O segment Vodafone Idea, Manappuram Finance and Max Financial Services. On the other hand, the top losers were Piramal Enterprises, Dish TV India and Strides Pharma Science. 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 1.39% and reached 16.11.The 50 share Nifty was down by 58.80 points or 0.51% to settle at 11,512.40.

Among, Nifty calls, 12,000 SP from the October month expiry was the most active call with an addition of 0.30 million open interests. Among Nifty puts, 11,500 from the October month expiry was the most active put with an addition of 0.15 million open interests. The maximum OI outstanding for Calls was at 11,500 SP (1.73 mn) and that for Puts was at 11,000 SP (1.83 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,570.75 -- Pivot Point 11,535.25 -- Support -- 11,476.90.

The Nifty Put Call Ratio (PCR) finally stood at 0.96 for October month contract. The top five scrips with highest PCR on Bosch (18.50), MRF (2.00), Cummins India (1.86), Tata Motors – DVR (1.61) and Mahindra & Mahindra Fin. Services (1.33).

Among most active underlying, Reliance Industries witnessed an addition of 0.24 million units of Open Interest in the October month futures contract, followed by State Bank of India witnessing an addition of 3.32 million units of Open Interest in the October month contract, Housing Development Finance Corporation witnessed an addition of 2.00 million units of Open Interest in the October month contract, Axis Bank witnessed an addition of 1.14 million units of Open Interest in the October month contract and ICICI Bank witnessed an addition of 1.91 million units of Open Interest in the October month future contract.

Nifty edges lower; ends below 11,550 mark

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