Nifty resumes southbound journey

S&P CNX -- Nifty -- resumed its southbound journey and closed the trading session 0.68% lower on Monday. After making gap down opening, market continued to show a sluggish trend throughout the day, after S&P Global Ratings said that the Indian economy is in deep trouble with growth expected to contract by 5 percent in this year. It added that difficulties in containing the virus, an anemic policy response, and underlying vulnerabilities, especially across the financial sector, are leading us to expect growth to fall this year before rebounding in 2021. Traders failed to draw any sense of relief with Commerce and Industry Minister Piyush Goyal’s statement that adoption of technology and the digital economy would play a vital role in transforming business enterprises in the future and achieving the target of $5 trillion economy. Index continued its free fall, as traders' body the Apparel and Handloom Exporters' Association representing around 400 micro, small and medium enterprises in the state said the ongoing lockdown has caused a cascading effect on the deliveries of goods committed till September. Finally, Nifty ended sluggish day of trade below its crucial 10350 level.

All of the NSE sectoral indices ended in red except FMCG. The top gainers from the F&O segment were The Vodafone Idea, Bharat Electronics and Just Dial. On the other hand, the top losers were Bharat Forge, Ashok Leyland and Equitas Holdings. 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 increased by 0.61% and reached 28.91. The 50 share Nifty down by 70.60 points or 0.68% to settle at 10,312.40.

Nifty July 2020 futures closed at 10261.95 (LTP) on Monday, at a discount of 50.45 points over spot closing of 10312.40, while Nifty August 2020 futures ended at 10258.90 (LTP), at a discount of  53.50 points over spot closing. Nifty July futures saw an addition of 0.86 million (mn) units, taking the total outstanding open interest (OI) to 12.49 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 premium of 1.05 points at 2881.05 (LTP) compared with spot closing of 2880.00. The numbers of contracts traded were 40,904 (Provisional).

HDFC Bank July 2020 futures traded at a discount of 12.50 points at 1063.00 (LTP) compared with spot closing of 1075.50. The numbers of contracts traded were 40,771 (Provisional).

Reliance Industries July 2020 futures traded at a discount of 3.90 points at 1718.80 (LTP) compared with spot closing of 1722.70. The numbers of contracts traded were 33,025 (Provisional).

Axis Bank July 2020 futures traded flat at 404.90 (LTP) compared with spot closing of 404.90. The numbers of contracts traded were 29,094 (Provisional).
ICICI Bank July 2020 futures traded at a premium of 0.30 points at 342.80 (LTP) compared with spot closing of 342.50. The numbers of contracts traded were 25,241 (Provisional).

Among, Nifty calls, 11000 SP from the July month expiry was the most active call with an addition of 0.29 million open interests. Among Nifty puts, 10000 SP from the July month expiry was the most active put with an addition of 0.21 million open interests. The maximum OI outstanding for Calls was at 11500 SP (1.98 mn) and that for Puts was at 9000 SP (2.32 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,359.03 -- Pivot Point 10,291.32 -- Support -- 10,244.68.

The Nifty Put Call Ratio (PCR) finally stood at (1.49) for July month contract. The top five scrips with highest PCR on Bajaj Finance (1.10), Info Edge (India) (1.06), Vedanta (1.06), Bajaj Finserv (0.96) and Indiabulls Housing Finance (0.94).

Among most active underlying, Reliance Industries witnessed an addition of 2.31 million units of Open Interest in the July month futures contract, followed by Bajaj Finance witnessing a contraction of 0.30 million units of Open Interest in the July month contract, HDFC Bank witnessed an addition of 5.39 million units of Open Interest in the July month contract, ITC witnessed an addition of 4.03 million units of Open Interest in the July month contract and State Bank Of India witnessed an addition of 4.07 million units of Open Interest in the July month future contract.