Indian equity benchmark -- Nifty --extended its bearish mood for second straight session on Monday by witnessing biggest 1-day fall, amid a global sell-off on rapid spread of novel coronavirus across the world and with surprise Yes Bank fiasco. Earlier, market made a gap-down opening, as traders were concerned with credit rating agency Moody's statement that the coronavirus has increased the risk of a global recession this year. It added that advanced economies including the United States, Japan, Germany, Italy, France, Britain and Korea could all fall into recession in an adverse scenario. Market extended its downfall with a report that snapping their six-month buying streak, FPIs pulled out a net Rs 13,157 crore from the Indian capital markets in the first five trading sessions of March as the coronavirus outbreak spooked investors’ sentiment.
In the late afternoon session, market fell sharply, as sentiment on the street dampened with Asian Development Bank’s (ADB) statement that the coronavirus outbreak has the potential to significantly harm the Asian economies, and the global economy may suffer losses of $77-347 billion. It also said the virus outbreak may impact developing Asian economies through numerous channels, including sharp declines in domestic demand, lower tourism and business travel, trade and production linkages, supply disruptions, and health effects. Traders ignored the latest Reserve Bank of India’s (RBI) data showing that the country's foreign exchange reserves swelled by $5.42 billion to a lifetime high of $481.54 billion in the week to February 14, on the back of rise in foreign currency assets. In the previous week, the foreign exchange reserves had increased by $29 million to $476.12 billion. Finally, Nifty ended worst day of trade with huge cut of around five percent.
All the NSE sectoral indices ended in red. The top gainers from the F&O segment were The Yes Bank, Vodafone Idea and Bharat Petroleum Corporation. On the other hand, the top losers were RBL Bank, Indiabulls Housing Finance and Oil & Natural Gas Corporation. In the index option segment, maximum OI continues to be seen in the 11700 -12,200 calls and 9,800 - 10,200 puts indicating this is the trading range expectation.
India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 20.11% and reached 30.80. The 50 share Nifty down by 538.00 points or 4.90% to settle at 10,451.45.
Nifty March 2020 futures closed at 10447.00 (LTP) on Monday, at a discount of 4.45 points over spot closing of 10451.45, while Nifty April 2020 futures ended at 10505.20 (LTP), at a premium of 53.75 points over spot closing. Nifty March futures saw an addition of 2.67 million (mn) units, taking the total outstanding open interest (OI) to 20.08 mn units. The near month derivatives contract will expire on March 26, 2020 (Provisional).
From the most active contracts, Reliance Industries March 2020 futures traded at a premium of 4.70 points at 1109.20 (LTP) compared with spot closing of 1104.50. The numbers of contracts traded were 76,970 (Provisional).
State Bank of India March 2020 futures traded at a premium of 0.70 points at 253.00 (LTP) compared with spot closing of 252.30. The numbers of contracts traded were 49,797 (Provisional).
ICICI Bank March 2020 futures traded at a premium of 1.25 points at 458.75 (LTP) compared with spot closing of 457.50. The numbers of contracts traded were 44,142 (Provisional).
HDFC Bank March 2020 futures traded at a premium of 2.00 points at 1114.00 (LTP) compared with spot closing of 1112.00. The numbers of contracts traded were 35,903 (Provisional).
Indusind Bank March 2020 futures traded at a premium of 3.10 points at 893.00 (LTP) compared with spot closing of 889.90. The numbers of contracts traded were 33,993 (Provisional).
Among, Nifty calls, 11000 SP from the March month expiry was the most active call with an addition of 0.63 million open interests. Among Nifty puts, 10000 SP from the March month expiry was the most active put with an addition of 0.12 million open interests. The maximum OI outstanding for Calls was at 12000 SP (2.89 mn) and that for Puts was at 10000 SP (3.59 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,703.85 --- Pivot Point 10,499.15 --- Support --- 10,246.75.
The Nifty Put Call Ratio (PCR) finally stood at (1.20) for March month contract. The top five scrips with highest PCR on Cummins India (1.54), Oil India (1.43), Interglobe Aviation (1.28), Siemens (1.27) and Just Dial (1.15).
Among most active underlying, Reliance Industries witnessed an addition of 3.30 million units of Open Interest in the March month futures contract, followed by State Bank Of India witnessing an addition of 8.53 million units of Open Interest in the March month contract, Icici Bank witnessed a contraction of 9.25 million units of Open Interest in the March month contract, Bharat Petroleum Corporation witnessed an addition of 1.32 million units of Open Interest in the March month contract and Bajaj Finance witnessed an addition of 0.25 million units of Open Interest in the March month future contract (Provisional).
