Nifty halts 5-day gaining streak

Snapping five straight sessions of gains, Nifty ended marginally lower on Wednesday. Earlier, market started day’s trade marginally in green, as traders found support with Union minister for road transport and highways Nitin Gadkari’s statement that the current economic crisis being faced by India is a temporary phase and the country still remains the fastest growing economy in the world, and a favourable investment destination. Soon, market turned volatile, as traders were cautious with private report that economic activity continues to remain weak and will lead to a 6.1 percent contraction in India's GDP in the current fiscal. Further, market started trading in green zone, as asserting that green shoots are visible, Finance Minister Nirmala Sitharaman has assured the industry that the government is open to taking more actions in future to boost economic recovery. However, market failed to hold its gains and slipped into negative territory to touch intraday low point even after SEBI’s Chairman Ajay Tyagi’s states that the coronavirus pandemic and subsequent countrywide lockdown led to a surge of retail investors in equity markets and opening of new demat accounts. During June, 10 lakh new demat accounts were opened compared to 5 lakh a month in the pre-COVID era. Finally, Nifty ended the session below its crucial 11,150 mark.

Traders were seen piling up positions in PVT Bank, Media and Bank, while selling was witnessed in PSU Bank, Auto and IT. The top gainers from the F&O segment were Mahindra & Mahindra Financial Services, Muthoot Finance and Axis Bank. On the other hand, the top losers were Piramal Enterprises, Jindal Steel & Power and Hero MotoCorp. In the index option segment, maximum OI continues to be seen in the 11,300 - 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 1.87 and reached 24.88. The 50 share Nifty down by 29.65 points or 0.27% to settle at 11,132.60.

Nifty July 2020 futures closed at 11126.00 (LTP) on Wednesday, at a discount of 6.60 points over spot closing of 11132.60, while Nifty August 2020 futures ended at 11130.00 (LTP), at a discount of 2.60 points over spot closing. Nifty July futures saw an addition of 0.42 million (mn) units, taking the total outstanding open interest (OI) to 11.05 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 0.85 points at 476.85 (LTP) compared with spot closing of 476.00. The numbers of contracts traded were 75,148 (Provisional).

Reliance Industries July 2020 futures traded at a discount of 0.90 points at 2003.10 (LTP) compared with spot closing of 2004.00. The numbers of contracts traded were 65,913 (Provisional).

Bajaj Finance July 2020 futures traded at a discount of 13.70 points at 3236.30 (LTP) compared with spot closing of 3250.00. The numbers of contracts traded were 64,876 (Provisional).

ICICI Bank July 2020 futures traded at a premium of 0.40 points at 382.20 (LTP) compared with spot closing of 381.80. The numbers of contracts traded were 42,140 (Provisional).

State Bank of India July 2020 futures traded at a premium of 0.20 points at 192.35 (LTP) compared with spot closing of 192.15. The numbers of contracts traded were 29,716 (Provisional).

Among, Nifty calls, 11200 SP from the July month expiry was the most active call with an addition of 0.32 million open interests. Among Nifty puts, 11000 SP from the July month expiry was the most active put with an addition of 0.42 million open interests. The maximum OI outstanding for Calls was at 11500 SP (3.17 mn) and that for Puts was at 10000 SP (3.73 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,228.28 -- Pivot Point 11,142.42 -- Support -- 11,046.73.

The Nifty Put Call Ratio (PCR) finally stood at (1.66) for July month contract. The top five scrips with highest PCR on Infosys (1.31), Wipro (1.31), Piramal Enterprises (1.29), Mahindra & Mahindra Fin. Services (1.11) and Muthoot Finance (1.08).

Among most active underlying, Reliance Industries witnessed a contraction of 2.44 million units of Open Interest in the July month futures contract, followed by Bajaj Finance witnessing a contraction of 0.25 million units of Open Interest in the July month contract, Axis Bank witnessed an addition of 0.67 million units of Open Interest in the July month contract, Hindustan Unilever witnessed a contraction of 0.67 million units of Open Interest in the July month contract and State Bank Of India witnessed a contraction of 1.58 million units of Open Interest in the July month future contract (Provisional).