Nifty resumes southbound journey

S&P CNX -- Nifty -- resumed its southbound journey as sentiments turned bearish on Wednesday. Market made slightly positive start with NITI Aayog CEO Amitabh Kant’s statement that India will bounce back with a vengeance with green shoots in the economy already being visible, amidst the multiple challenges thrown up by the Covid-19 pandemic. But, soon market turned volatile, as traders were cautious with private report that the country’s economy is likely to show a double-digit contraction in the April-June quarter due to the restriction on economic activities on account of the COVID-19 pandemic. Further, index started trading near neutral line in negative trend even after finance ministry states that the banks have sanctioned loans of about Rs 1,14,502 crore under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for MSME sector reeling under the economic slowdown caused by the COVID-19 pandemic. However, in late afternoon deals market regained its positive trend for little time, but its failed to continue its bull run and slipped into the negative terrain to closed the session with cut of over half a percent, as Crisil Research’s survey report states that as much as 90 per cent of private equity and venture capital investors foresee a decline in fund-raising activities over the next 6 to 12 months because of the Covid-19 pandemic.

Traders were seen piling up positions in PSU Bank, Metal and FMCG, while selling was witnessed in Reality, Auto and IT. The top gainers from the F&O segment were The Steel Authority of India, National Aluminium Company and Shriram Transport Finance Company. On the other hand, the top losers were Cummins India, Bajaj Finance and Zee Entertainment Enterprises. 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 3.95% and reached 26.09. The 50 share Nifty down by 93.90 points or 0.87% to settle at 10,705.75.

Nifty July 2020 futures closed at 10682.20 (LTP) on Wednesday, at a discount of 23.55 points over spot closing of 10705.75, while Nifty August 2020 futures ended at 10686.05 (LTP), at a discount of  19.70 points over spot closing. Nifty July futures saw an addition of 0.40 million (mn) units, taking the total outstanding open interest (OI) to 12.08 mn units. The near month derivatives contract will expire on July 30, 2020 (Provisional).

From the most active contracts, Indusind Bank July 2020 futures traded at a premium of 3.00 points at 553.00 (LTP) compared with spot closing of 550.00. The numbers of contracts traded were 63,309 (Provisional).

State Bank Of India July 2020 futures traded at a premium of 0.90 points at 192.60 (LTP) compared with spot closing of 191.70. The numbers of contracts traded were 62,085 (Provisional).

Bajaj Finance July 2020 futures traded at a discount of 13.95 points at 3183.05 (LTP) compared with spot closing of 3197.00. The numbers of contracts traded were 57,741 (Provisional).

Axis Bank July 2020 futures traded at a premium of 0.85 points at 444.85 (LTP) compared with spot closing of 444.00. The numbers of contracts traded were 42,610 (Provisional).

ICICI Bank July 2020 futures traded at a premium of 1.10 points at 369.70 (LTP)  compared with spot closing of 368.60. The numbers of contracts traded were 40,710 (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, 10500 SP from the July month expiry was the most active put with an addition of 0.14 million open interests. The maximum OI outstanding for Calls was at 11500 SP (2.45 mn) and that for Puts was at 10000 SP (3.26 mn). The respective Support and Resistance levels of Nifty are: Resistance 10,810.22 -- Pivot Point 10,743.38 -- Support -- 10,638.92.

The Nifty Put Call Ratio (PCR) finally stood at (1.55) for July month contract. The top five scrips with highest PCR on Bharat Forge (1.28), Piramal Enterprises (1.26), Bajaj Finance (1.11), Bandhan Bank (0.99) and Bharat Electronics (0.98).

Among most active underlying, State Bank Of India witnessed an addition of 1,65,15,000 million units of Open Interest in the July month futures contract, followed by Bajaj Finance witnessing an addition of 5,68,750 million units of Open Interest in the July month contract, Reliance Industries witnessed an addition of 5,98,930 million units of Open Interest in the July month contract, Indusind Bank witnessed an addition of 10,10,400 million units of Open Interest in the July month contract and Axis Bank witnessed a contraction of 0.06 million units of Open Interest in the July month future contract.