Nifty snaps 2-day losing streak

S&P CNX -- Nifty -- exhibited a smart pull back in Friday’s trade ending with a gain of around a percentage and snapped two days losing streak. Market made a gap up opening and continued trading in green zone throughout the day, as traders took encouragement with Union Commerce Minister Piyush Goyal’s statement that India is keen to focus on certain sectors where it has competitive advantage, emphasising that the country cannot afford to remain dependent on low cost, low quality products. However, upside remained capped after Federation of Indian Export Organisations (FIEO) has said that India’s exports are likely to witness a 10-12% year-on-year decline during the ongoing fiscal (FY 2020-21), if the current trend persists.

But market continued its fine fettle trade, as Minister of State for Defence Shripad Naik said that strong indigenous defence-manufacturing capabilities would help India safeguard its prosperity generated over the last couple of decades. Naik emphasised on the huge opportunity the defence sector presents for the micro, small and medium enterprises (MSMEs). And finally Nifty ended last trading day of week near intraday high point, as some optimism also came with a report stated that India and the US will restart high level negotiations on a trade pact in the coming days.

Traders were seen piling up positions in IT, PSU Bank and Metal while selling was witnessed in FMCG, Reality and Pharma. The top gainers from the F&O segment were The Infosys, Bharat Petroleum Corporation and NIIT Technologies. On the other hand, the top losers were Max Financial Services, PVR and Bajaj Finance. In the index option segment, maximum OI continues to be seen in the 11,200 - 11,700 calls and 8800 - 9300 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short-term expectation of volatility decreased by 3.34% and reached 28.73. The 50 share Nifty up by 94.10 points or 0.91% to settle at 10,383.00.

Nifty July 2020 futures closed at 10332.00 (LTP) on Friday, at a discount of 51.00 points over spot closing of 10383.00, while Nifty August 2020 futures ended at 10326.05 (LTP), at a discount of 56.95 points over spot closing. Nifty July futures saw an addition of 1.51 million (mn) units, taking the total outstanding open interest (OI) to 12.15 mn units. The near month derivatives contract will expire on July 30, 2020 (Provisional).

From the most active contracts, Bajaj Finance July 2020 futures traded at a discount of 14.90 points at 2897.65 (LTP) compared with spot closing of 2912.55. The numbers of contracts traded were 40,807 (Provisional).

Reliance Industries July 2020 futures traded at a discount of 3.15 points at 1746.85 (LTP) compared with spot closing of 1750.00. The numbers of contracts traded were 38,634 (Provisional).

HDFC Bank July 2020 futures traded at a discount of 13.00 points at 1045.50 (LTP) compared with spot closing of 1058.50. The numbers of contracts traded were 36,355 (Provisional).

ICICI Bank July 2020 futures traded at a discount of 0.60 points at 350.40 (LTP) compared with spot closing of 351.00. The numbers of contracts traded were 32,582 (Provisional).

Indusind Bank July 2020 futures traded at a premium of 1.80 points at 494.80 (LTP) compared with spot closing of 493.00. The numbers of contracts traded were 32,120 (Provisional).

Among, Nifty calls, 11000 SP from the July month expiry was the most active call with an addition of 0.12 million open interests. Among Nifty puts, 10000 SP from the July month expiry was the most active put with an addition of 0.31 million open interests. The maximum OI outstanding for Calls was at 11500 SP (1.89 mn) and that for Puts was at 9000 SP (2.12 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,424.82 -- Pivot Point 10,368.03 -- Support --10,326.22.

The Nifty Put Call Ratio (PCR) finally stood at (1.52) for July month contract. The top five scrips with highest PCR on Info Edge (India) (1.30), Vedanta (1.06), Bajaj Finance (1.01), Cummins India (1.00) and Indiabulls Housing Finance (0.99).

Among most active underlying, Reliance Industries witnessed an addition of 2.69 million units of Open Interest in the July month futures contract, followed by Infosys witnessing an addition of 6.72 million units of Open Interest in the July month contract, Bajaj Finance witnessed an addition of 0.45 million units of Open Interest in the July month contract, HDFC Bank witnessed an addition of 5.61 million units of Open Interest in the July month contract and Tata Consultancy Services witnessed an addition of 1.21 million units of Open Interest in the July month future contract.