Bulls makes strong come back on Dalal Street; Nifty reclaims10,400 mark

Bulls made spectacular comeback, after a sharp cut in previous two sessions, holding their control throughout the day’s trade on Wednesday. Market made a slightly positive start after Reserve Bank of India (RBI) showed that India's current account balance recorded a marginal surplus in the January-March quarter of FY20. Market extended its upside in the afternoon session, as a gauge of India's manufacturing sector jumped in June, as economic activity resumed after the nation eased curbs introduced to slow the spread of the Covid-19 virus. The India Manufacturing Purchasing Managers’ Index, compiled by IHS Markit, stood at 47.2 in June compared with 30.8 in May on a seasonally adjusted basis.

The index continued the gaining monument with report that World Bank approved $750 million loan to support increased flow of finance into the hands of India's micro, small, and medium enterprises (MSMEs), severely impacted by the Covid-19 crisis. Traders overlooked Fitch Ratings in its June update of Global Economic Outlook has lowered India's growth forecast for financial year 2021-22 to 8 percent from 9.5 percent projected last month. However, the rating agency retained its projection of Indian economy contracting by 5 percent in the current fiscal (FY21).  It projected Indian economy to grow 5.5 percent in 2022-23. Finally, Nifty ended wonderful day of trade with the gains of over a percent.

Traders were seen piling up positions in PSU Bank, Bank and PVT Bank, while selling was witnessed in Pharma, Reality and IT. The top gainers from the F&O segment were The Indiabulls Housing Finance, Axis Bank and Ujjivan Financial Services. On the other hand, the top losers were Jindal Steel & Power, Vodafone Idea and Glenmark Pharmaceuticals. 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 decreased by 3.46% and reached 28.10. The 50 share Nifty up by 127.95 points or 1.24% to settle at 10,430.05.

Nifty July 2020 futures closed at 10396.55 (LTP) on Wednesday, at a discount of 33.50 points over spot closing of 10430.05, while Nifty August 2020 futures ended at 10383.65 (LTP), at a discount of 46.40 points over spot closing. Nifty July futures saw an addition of 0.11 million (mn) units, taking the total outstanding open interest (OI) to 11.62 mn units. The near month derivatives contract will expire on July 30, 2020 (Provisional).

From the most active contracts, Axis Bank July 2020 futures traded at a premium of 1.20 points at 433.65 (LTP) compared with spot closing of 432.45. The numbers of contracts traded were 49,732 (Provisional). 

Bajaj Finance July 2020 futures traded at a premium of 8.00 points at 2957.00 (LTP) compared with spot closing of 2949.00. The numbers of contracts traded were 44,231 (Provisional).

Reliance Industries July 2020 futures traded at a discount of 0.40 points at 1735.85 (LTP) compared with spot closing of 1736.25. The numbers of contracts traded were 37,849 (Provisional).

ICICI Bank July 2020 futures traded at a discount of 0.05 points at 362.35 (LTP) compared with spot closing of 362.40. The numbers of contracts traded were 34,443 (Provisional).

HDFC Bank July 2020 futures traded at a discount of 4.80 points at 1074.70 (LTP) compared with spot closing of 1079.50. The numbers of contracts traded were 31,145(Provisional).

Among, Nifty calls, 11000 SP from the July month expiry was the most active call with an addition of 0.14 million open interests. Among Nifty puts, 10000 SP from the July month expiry was the most active put with an addition of 0.45 million open interests. The maximum OI outstanding for Calls was at 11500 SP (2.05 mn) and that for Puts was at 10000 SP (2.90 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,484.87 -- Pivot Point 10,392.23 -- Support -- 10,337.42.

The Nifty Put Call Ratio (PCR) finally stood at (1.53) for July month contract. The top five scrips with highest PCR on Bajaj Finance (1.06), Vedanta (1.06), Bharat Forge (1.00), Piramal Enterprises (0.98) and Eicher Motors (0.97).

Among most active underlying, Reliance Industries witnessed an addition of 0.71 million units of Open Interest in the July month futures contract, followed by Bajaj Finance witnessing an addition of 0.02 million units of Open Interest in the July month contract, Axis Bank witnessed an addition of 9.30 million units of Open Interest in the July month contract, ICICI Bank witnessed a contraction of 4.25 million units of Open Interest in the July month contract and HDFC Bank witnessed an addition of 2.30 million units of Open Interest in the July month future contract.