Nifty continues downtrend for second consecutive session

After trading firmly till mid noon trade, domestic benchmark S&P CNX Nifty turned red and ended the day’s trade near neutral line weighed down by sharp selling in frontline counters. Earlier, market made a gap up opening, as traders took encouragement after Union minister Mahendra Nath Pandey said that the government has approved the third phase of skill development scheme, Pradhan Mantri Kaushal Vikas Yojana (PMKVY), with an increased focus on digital technology and industry 4.0. The index continued the gaining monument with report that the Reserve Bank of India (RBI) will be conducting a buy and sell open market operations (OMO) in bonds worth Rs 10,000 crore.

Some comfort also came with report that India has finally developed its first indigenous COVID-19 vaccine named COAXING. A Hyderabad-based company called Bharat Biotech has achieved this success in collaboration with the Indian Council of Medical Research (ICMR) and National Institute of Virology, Pune. The recently developed coronavirus vaccine has got the approval for human trials by the Drug Controller General of India (DCGI). However, in last leg of trade market wiped out all of its gains to enter into negative territory, as sentiments got hit with India Ratings and Research (Ind-Ra) in its latest report has said that the gross state domestic product (GSDP) of all states in India is likely to contract in the range of 1.4 to 14.3 percent in the current financial year (FY21) due to the impact of Covid-19-induced lockdown on economic activities.

Traders were seen piling up positions in Auto, FMCG and Financial services, while selling was witnessed in PSU Bank, Media and Pharma. The top gainers from the F&O segment were The Jindal Steel & Power, Max Financial Services and Bosch. On the other hand, the top losers were Vodafone Idea, Glenmark Pharmaceuticals and Indiabulls Housing Finance. In the index option segment, maximum OI continues to be seen in the 11,200 - 11,700 calls and 9700- 10300 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short-term expectation of volatility increased by 0.72% and reached 29.11. The 50 share Nifty down by 10.30 points or 0.10% to settle at 10,302.10.

Nifty July 2020 futures closed at 10258.50 (LTP) on Tuesday, at a discount of 43.60 points over spot closing of 10302.10, while Nifty August 2020 futures ended at 10250.10 (LTP), at a discount of 52.00 points over spot closing. Nifty July futures saw an addition of 0.92 million (mn) units, taking the total outstanding open interest (OI) to 12.34 mn units. The near month derivatives contract will expire on July 30, 2020 (Provisional).

From the most active contracts, Reliance Industries July 2020 futures traded at a discount of 5.50 points at 1702.00 (LTP) compared with spot closing of 1707.50. The numbers of contracts traded were 35,406 (Provisional).

Bajaj Finance July 2020 futures traded at a discount of 3.00 points at 2825.00 (LTP) compared with spot closing of 2828.00. The numbers of contracts traded were 31,763 (Provisional).

ICICI Bank July 2020 futures traded at a discount of 1.10 points at 350.90 (LTP) compared with spot closing of 352.00. The numbers of contracts traded were 30,972 (Provisional).

HDFC Bank July 2020 futures traded at a discount of 11.05 points at 1055.40 (LTP) compared with spot closing of 1066.45. The numbers of contracts traded were 28,053 (Provisional).

Tata Steel July 2020 futures traded at a discount of 1.35 points at 325.90 (LTP) compared with spot closing of 327.25. The numbers of contracts traded were 24,331 (Provisional).

Among, Nifty calls, 11000 SP from the July month expiry was the most active call with an addition of 0.13 million open interests. Among Nifty puts, 10000 SP from the July month expiry was the most active put with an addition of 0.51 million open interests. The maximum OI outstanding for Calls was at 11500 SP (2.01 mn) and that for Puts was at 10000 SP (2.57 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,379.65 -- Pivot Point 10,323.50 --Support -- 10,245.95.

The Nifty Put Call Ratio (PCR) finally stood at (1.48) for July month contract. The top five scrips with highest PCR on Bajaj Finance (1.05), Vedanta (1.05), Info Edge (India) (1.03), Kotak Mahindra Bank (0.96) and Bajaj Finserv (0.92).

Among most active underlying, Reliance Industries witnessed an addition of 1.94 million units of Open Interest in the July month futures contract, followed by Bajaj Finance witnessing an addition of 0.08 million units of Open Interest in the July month contract, Tata Steel witnessed an addition of 0.48 million units of Open Interest in the July month contract, ICICI Bank witnessed a contraction of 1.29 million units of Open Interest in the July month contract and HDFC Bank witnessed an addition of 1.64 million units of Open Interest in the July month future contract.