Nifty ends flat on Friday

Indian benchmark -- Nifty -- finished the session marginally lower on Friday. The day began on negative note, as traders were cautious with Economic Affairs Secretary Tarun Bajaj’s statement that the government is unlikely to meet the Budget targets for 2020-21 due to the COVID-19 crisis but contraction in economic growth may not be as severe as being pointed out by the outside world. Further, index continued its free fall after the government imposed restrictions on public procurement from China and other countries with common border. The Government of India amended the General Financial Rules 2017 to enable imposition of restrictions on bidders from countries which share a land border with India on grounds of defence of India, or matters directly or indirectly related thereto including national security.

However, in the late afternoon trade, market managed to cut some losses, as traders found some support with IHS Markit’s statement that the Indian economy is likely to rebound in the second half of 2020 as the impact of the COVID-19 pandemic recedes, and is projected to grow by 6.7 percent in the next financial year. Finally, Nifty ended sluggish trade of day below its crucial 11200 mark, as Rajya Sabha MP -- Subramanian Swamy stated that India's growth rate may plunge to 6 to 9 percent during the current financial year due to COVID-19 pandemic and may bounce back next fiscal if correct policies were worked out.

All of the NSE sectoral indices red in green except IT. The top gainers from the F&O segment were HCL Technologies, Reliance Industries and IDFC First Bank. On the other hand, the top losers were Zee Entertainment Enterprises, Cholamandalam Investment and Finance Company and Mahindra & Mahindra Financial Services. In the index option segment, maximum OI continues to be seen in the 11,300 - 11,700 calls and 10900 - 11100 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 0.10 and reached 24.53. The 50 share Nifty down by 21.30 points or 0.19% to settle at 11,194.15.

Nifty July 2020 futures closed at 11170.00 (LTP) on Friday, at a discount of 24.15 points over spot closing of 11194.15, while Nifty August 2020 futures ended at 11177.50 (LTP), at a discount of 16.65 points over spot closing. Nifty July futures saw an addition of 0.47 million (mn) units, taking the total outstanding open interest (OI) to 10.77 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 premium of 1.70 points at 2150.10 (LTP) compared with spot closing of 2148.40. The numbers of contracts traded were 1,26,346 (Provisional).

ICICI Bank July 2020 futures traded at a discount of 0.15 points at 382.35 (LTP) compared with spot closing of 382.50. The numbers of contracts traded were 56,332 (Provisional).

IndusInd Bank July 2020 futures traded at a premium of 1.15 points at 523.00 (LTP) compared with spot closing of 521.85. The numbers of contracts traded were 45,100 (Provisional).

SBIN July 2020 futures traded at a discount of 0.40 points at 191.55 (LTP) compared with spot closing of 191.95. The numbers of contracts traded were 31,888 (Provisional).

Bajaj Finance July 2020 futures traded at a discount of 12.95 points at 3237.05 (LTP) compared with spot closing of 3250.00. The numbers of contracts traded were 31,588 (Provisional).

Among, Nifty calls, 11200 SP from the July month expiry was the most active call with an addition of 0.86 million open interests. Among Nifty puts, 11000 SP from the July month expiry was the most active put with an addition of 0.64 million open interests. The maximum OI outstanding for Calls was at 11500 SP (3.87 mn) and that for Puts was at 11000 SP (4.45 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,249.60 --- Pivot Point 11,169.95 -- Support -- 11,114.50.

The Nifty Put Call Ratio (PCR) finally stood at (1.47) for July month contract. The top five scrips with highest PCR on Piramal Enterprises (1.22), Eicher Motors (1.18), Wipro (1.11), Infosys (1.10) and Mahindra & Mahindra Financial Services (1.08).

Among most active underlying, Reliance Industries witnessed an addition of 2.76 million units of Open Interest in the July month futures contract, followed by ICICI Bank witnessing an addition of 10.37 million units of Open Interest in the July month contract, Bajaj Finance witnessed an addition of 0.28 million units of Open Interest in the July month contract, SBIN witnessed an addition of 2.36 million units of Open Interest in the July month contract and Infosys witnessed an addition of 1.28 million units of Open Interest in the July month future contract (Provisional).