The local benchmark, Nifty witnessed drastic fall on Thursday with huge cut of over eight percent, as the coronavirus pandemic wreaked havoc on global markets. Markets started off with massive losses, as private report stated that two cases of novel Coronavirus, or Covid-19, were confirmed in Mumbai on March 11, marking the first cases for the metropolitan city. Market continued to sink in deep red, as traders were concerned with Department-Related Parliamentary Standing Committee on Commerce's statement that the FDI equity inflow in manufacturing is declining and the sector's share in the total FDI inflow in 2018-19 was around 23% which is very low. It said the low inflow of FDI in the manufacturing sector defeats the very purpose of Make in India scheme.
However, heavy selling pressure in the last hour of trade dragged the market below its psychological 9600 level, as private report stated that only 15% of business executives worldwide have confidence in their company's own top leadership to successfully manage disruption - including unexpected events like pandemics, technological advances, shifting demographics and climate change. This lack of confidence is striking since 95% of executives also believe that managing disruption well is now critical for companies to succeed in turbulent times. Traders ignored private report that falling crude oil prices will help reduce current account deficit by 25 basis points to 0.7% of the GDP in FY2021. Besides, the Reserve Bank of India’s (RBI) data showed that the central bank continued to be a net purchaser of the US dollar after it bought $10.27 billion in January on a net basis from the spot market.
All of the NSE sectoral indices ended in red. The only gainer from from the F&O segment wasTata Power. On the other hand, the top losers were Adani Power, Motherson Sumi Systems, and Glenmark Pharmaceuticals. In the index option segment, maximum OI continues to be seen in the 11700 -12200 calls and 10700- 11300 puts indicating this is the trading range expectation.
India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 30.44% and reached 41.16. The 50 share Nifty down by 868.25 points or 8.30% to settle at 9,590.15.
Nifty March 2020 futures closed at 9580.00 (LTP) on Thursday, at a discount of 10.15 points over spot closing of 9590.15, while Nifty April 2020 futures ended at 9634.00 (LTP), at a premium of 43.85 points over spot closing. Nifty March futures saw an addition of 1.23 million (mn) units, taking the total outstanding open interest (OI) to 18.15 mn units. The near month derivatives contract will expire on March 26, 2020 (Provisional).
From the most active contracts, Indiabulls Housing Finance March 2020 futures traded at a discount of 14.90 points at 151.00 (LTP) compared with spot closing of 165.90. The numbers of contracts traded were 59,885 (Provisional).
State Bank Of India March 2020 futures traded at a discount of 0.55 points at 214.85 (LTP) compared with spot closing of 215.40. The numbers of contracts traded were 55,951 (Provisional).
HDFC Bank March 2020 futures traded at a discount of 6.75 points at 1025.25 (LTP) compared with spot closing of 1032.00. The numbers of contracts traded were 55,537 (Provisional).
Reliance Industries March 2020 futures traded at a discount of 2.00 points at 1057.00 (LTP) compared with spot closing of 1059.00. The numbers of contracts traded were 49,741 (Provisional).
ICICI Bank March 2020 futures traded at a discount of 1.95 points at 431.00 (LTP) compared with spot closing of 432.95. The numbers of contracts traded were 45,894 (Provisional).
Among, Nifty calls, 10000 SP from the March month expiry was the most active call with an addition of 0.82 million open interests. Among Nifty puts, 9500 SP from the March month expiry was the most active put with an addition of 1.12 million open interests. The maximum OI outstanding for Calls was at 12000 SP (2.28 mn) and that for Puts was at 11000 SP (2.67 mn). The respective Support and Resistance levels of Nifty are: Resistance 9,917.93 -- Pivot Point 9,712.97 -- Support -- 9,385.18
The Nifty Put Call Ratio (PCR) finally stood at (1.17) for March month contract. The top five scrips with highest PCR on Cummins India (1.49), Mahindra & Mahindra Fin. Services (1.18), Interglobe Aviation (1.09), Just Dial (1.05) and Siemens (1.02).
Among most active underlying, State Bank Of India witnessed a contraction of 18,72,000 million units of Open Interest in the March month futures contract, followed by Reliance Industries witnessing a contraction of 5,33,000 million units of Open Interest in the March month contract, ICICI Bank witnessed an addition of 79,02,125 million units of Open Interest in the March month contract, Hdfc Bank witnessed an addition of 33,34,000 million units of Open Interest in the March month contract and Bajaj Finance witnessed an addition of 4,14,750 million units of Open Interest in the March month future contract (Provisional).
