Nifty extends gains for fifth consecutive session

NiThe domestic equity index -- Nifty -- finished with modest gain on Tuesday, extending its winning streak to the fifth consecutive session. Market made slightly positive start, as traders took support with Ficci- Dhruva Advisors industry survey report stated that the opening up of India's economy post lockdown and implementation of the economic package unveiled by the government have started showing results on the ground with initial signs of improvement in the performance of businesses now visible. Further, market started trading volatile, as traders were cautious with India Ratings and Research’s report that the impact of Covid-19 and the associated policy response may result in an additional Rs 1.67 lakh crore of debt from the top 500 debt-heavy private sector borrowers turning delinquent between FY21 and FY22. Index failed to protect its gains and slipped into negative territory in late morning deals.

However, in the afternoon deals, market regained its positive terrain with Finance Ministry’s Economic Affairs Department’s latest Macroeconomic Report for June said that early green shoots of economic revival have emerged in May and June with real activity indicators like electricity and fuel consumption, inter and intra-state movement of goods, retail financial transactions witnessing pick up. It also said economy will grow further on the back of a conducive policy environment, nudging the coronavirus-hit economy to move on the path of recovery and growth. Market extended its upside in the last lap of trading and touched its intraday high point. Finally Nifty closed the session above its crucial 10,750 mark.

Traders were seen piling up positions in PVT Bank, IT and Bank, while selling was witnessed in Metal, Reality and FMCG. The top gainers from the F&O segment were The Bosch, Mahindra & Mahindra Financial Services and Equitas Holdings. On the other hand, the top losers were Indraprastha Gas, Petronet LNG and Mahanagar Gas. 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 0.38% and reached 25.10. The 50 share Nifty up by 36.00 points or 0.33% to settle at 10,799.65.

Nifty July 2020 futures closed at 10755.95 (LTP) on Tuesday, at a discount of 43.70 points over spot closing of 10799.65, while Nifty August 2020 futures ended at 10746.60 (LTP), at a discount of 53.05 points over spot closing. Nifty July futures saw an addition of 0.87 million (mn) units, taking the total outstanding open interest (OI) to 12.11 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 10.90 points at 3339.00 (LTP) compared with spot closing of 3349.90. The numbers of contracts traded were 83,250 (Provisional).

ICICI Bank July 2020 futures traded at a premium of 0.00 points at 374.60 (LTP) compared with spot closing of 374.60. The numbers of contracts traded were 48,086 (Provisional).

Reliance Industries July 2020 futures traded at a premium of 5.90 points at 1828.05 (LTP) compared with spot closing of 1822.15. The numbers of contracts traded were 45,647 (Provisional).

Indusind Bank July 2020 futures traded at a premium of 2.40 points at 527.35 (LTP) compared with spot closing of 524.95. The numbers of contracts traded were 43,908 (Provisional).

Axis Bank July 2020 futures traded at a premium of 0.70 points at 446.65 (LTP) compared with spot closing of 445.95. The numbers of contracts traded were 35,719 (Provisional).

Among, Nifty calls, 11000 SP from the July month expiry was the most active call with a contraction of 0.15 million open interests. Among Nifty puts, 10500 SP from the July month expiry was the most active put with an addition of 0.33 million open interests. The maximum OI outstanding for Calls was at 11500 SP (2.45 mn) and that for Puts was at 10000 SP (3.25 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,845.73 -- Pivot Point 10,767.72 -- Support -- 10,721.63.

The Nifty Put Call Ratio (PCR) finally stood at (1.62) for July month contract. The top five scrips with highest PCR on Bharat Forge (1.31), Bajaj Finance (1.28), Piramal Enterprises (1.24), Eicher Motors (1.23) and Bandhan Bank (1.14).

Among most active underlying, Bajaj Finance witnessed an addition of 1.00 million units of Open Interest in the July month futures contract, followed by Reliance Industries witnessing an addition of 2.71 million units of Open Interest in the July month contract, ICICI Bank witnessed an addition of 3.47 million units of Open Interest in the July month contract, Infosys witnessed an addition of 4.56 million units of Open Interest in the July month contract and State Bank Of India witnessed an addition of 4.37 million units of Open Interest in the July month future contract.