After trading in green terrain for most part of the day, key equity benchmark --Nifty-- erased all its gain to close the session 2.05% lower on Tuesday, as the coronavirus pandemic-led recession fears kept investors jittery. Market made a cautious start, as sentiments remained downbeat with Care Ratings’ report that corporate India is expecting a 0.5% hit on economic growth in FY2020-21 if the coronavirus pandemic lasts longer, pushing up fiscal deficit and creating more bad loans for the bank. But, soon market added traction on the street to trade firm, as traders took some solace after Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that RBI has many provisions to provide cushion to the sagging economy, however, that will completely depend on the circumstances. The RBI has announced two key measures that the central bank will take to improve the liquidity condition of the Indian economy and financial markets. The RBI will conduct another 6-month dollar/rupee swap on March 23 later this month along with conducting Long-Term Repo Operations (LTRO) of up to Rs 1 lakh crore at the policy rate in multiple tranches. However, index erased major chunk of gains in late noon session to slip into negative territory, as Moody's Investors Service lowered India's GDP growth forecast for 2020 calendar year to 5.3 per cent, on coronavirus implications on the economy. Moody's had in February projected a 5.4 per cent real GDP growth for India in 2020. This too was a downgrade from 6.6 per cent earlier forecast. Finally nifty ended the session below its 9000 crucial level.
All sectoral indices ended in red on NSE except FMCG and Pharma. The top gainers from the F&O segment were Yes Bank, Bharat Electronics and Hindustan Petroleum Corporation. On the other hand, the top losers were Zee Entertainment Enterprises, Manappuram Finance and Century Textiles & Industries. In the index option segment, maximum OI continues to be seen in the 11,700 -12,200 calls and 8300 - 8800 puts indicating this is the trading range expectation.
India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 6.81% and reached 62.88. The 50 share Nifty down by 230.35 points or 2.50% to settle at 8,967.05.
Nifty March 2020 futures closed at 8900.00 (LTP) on Tuesday, at a discount of 67.05 points over spot closing of 8967.05, while Nifty April 2020 futures ended at 8940.00 (LTP), at a discount of 27.05 points over spot closing. Nifty March futures saw an addition of 0.43 million (mn) units, taking the total outstanding open interest (OI) to 17.42 mn units. The near month derivatives contract will expire on March 26, 2020 (Provisional).
From the most active contracts, ICICI Bank March 2020 futures traded at a discount of 0.45 points at 366.50 (LTP) compared with spot closing of 366.95. The numbers of contracts traded were 46,222 (Provisional).
Indusind Bank March 2020 futures traded at a discount of 1.05 points at 602.00 compared with spot closing of 603.05. The numbers of contracts traded were 45,716 (Provisional).
HDFC Bank March 2020 futures traded at a discount of 7.20 points at 969.00 (LTP) compared with spot closing of 976.20. The numbers of contracts traded were 44,987 (Provisional).
State Bank of India March 2020 futures traded at a discount of 0.85 points at 213.05 (LTP) compared with spot closing of 213.90. The numbers of contracts traded were 39,933 (Provisional).
Reliance Industries March 2020 futures traded at a discount of 2.95 points at 1008.55 (LTP) compared with spot closing of 1011.50. The numbers of contracts traded were 39,715 (Provisional).
Among, Nifty calls, 10000 SP from the March month expiry was the most active call with a contraction of 0.12 million open interests. Among Nifty puts, 8500 SP from the March month expiry was the most active put with a addition of 1.19 million open interests. The maximum OI outstanding for Calls was at 12000 SP (2.27 mn) and that for Puts was at 8500 SP (2.41 mn). The respective Support and Resistance levels of Nifty are: Resistance 9,275.37 -- Pivot Point 9,095.48 -- Support -- 8,787.17.
The Nifty Put Call Ratio (PCR) finally stood at 1.09 for March month contract. The top five scrips with highest PCR on Cummins India (1.40), Interglobe Aviation (1.11), Siemens (1.07), PVR (0.94) and Just Dial (0.93).
Among most active underlying, State Bank Of India witnessed a contraction of 2.72 million units of Open Interest in the March month futures contract, followed by Reliance Industries witnessing a contraction of 0.67 million units of Open Interest in the March month contract, ICICI Bank witnessed a contraction of 1.47 million units of Open Interest in the March month contract, Yes Bank witnessed a contraction of 40.32 million units of Open Interest in the March month contract and HDFC Bank witnessed a contraction of 2.14 million units of Open Interest in the March month future contract (Provisional).
