Nifty breaks falling spree

Nifty resumed its northward journey on Tuesday and ended the session with gains of above one and half percent. Earlier, the day began on a positive note, as RBI Governor Shaktikanta Das made a strong case for stepping up investments in the infrastructure sector to restart the economy reeling under the impact of the COVID-19 pandemic. Index started extending its gains, as traders took support with Commerce and Industry Minister Piyush Goyal’s statement that the government will soon set up a single window system for clearances and approvals for industry, and is working on creating a land bank with a view to attract investments.

Traders ignored 15th Finance Commission Chairman N K Singh’s statement that India will see a sharp V-shaped recovery in the third and fourth quarter of the current fiscal, but FY21 GDP growth would ultimately be in negative territory as the coronavirus lockdown led to serious demand and supply dislocations. Market continued its gaining momentum, as the novel vaccine developed by Oxford University and AstraZeneca is in its final leg of testing. After achieving safe and promising results in early-stage results, vaccine makers are moving forward to outsource phase III, one of the biggest and the most crucial testing stages in different countries. 

All of the NSE sectoral indices ended in green except Media. The top gainers from the F&O segment were GMR Infrastructure, UltraTech Cement and Apollo Hospitals Enterprise. On the other hand, the top losers were Bharat Electronics, Havells India and Muthoot Finance. 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 1.29 and reached 23.73. The 50 share Nifty up by 168.75 points or 1.52% to settle at 11,300.55.

Nifty July 2020 futures closed at 11299.25 (LTP) on Tuesday, at a discount of 1.30 points over spot closing of 11300.55, while Nifty August 2020 futures ended at 11303.00 (LTP), at a premium of 2.45 points over spot closing. Nifty July futures saw an addition of 0.15 million (mn) units, taking the total outstanding open interest (OI) to 8.38 mn units. The near month derivatives contract will expire on July 30, 2020 (Provisional).

From the most active contracts, ICICI Bank July 2020 futures traded at a premium of 1.15 points at 353.30 (LTP) compared with spot closing of 352.15. The numbers of contracts traded were 85,018 (Provisional).

Reliance Industries July 2020 futures traded at a discount of 4.95 points at 2172.05 (LTP) compared with spot closing of 2177.00. The numbers of contracts traded were 66,904 (Provisional).

Bajaj Finance July 2020 futures traded at a premium of 8.95 points at 3246.95 (LTP) compared with spot closing of 3238.00. The numbers of contracts traded were 39,264 (Provisional).

HDFC Bank July 2020 futures traded at a premium of 2.85 points at 1087.55 (LTP) compared with spot closing of 1084.70. The numbers of contracts traded were 37,215 (Provisional).

Axis Bank July 2020 futures traded at a premium of 0.65 points at 436.80 (LTP) compared with spot closing of 436.15. The numbers of contracts traded were 36,357 (Provisional).

Among, Nifty calls, 11300 SP from the July month expiry was the most active call with an addition of 0.19 million open interests. Among Nifty puts, 11200 SP from the July month expiry was the most active put with an addition of 2.31 million open interests. The maximum OI outstanding for Calls was at 11500 SP (4.26 mn) and that for Puts was at 11000 SP (5.08 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,361.73 -- Pivot Point 11,256.57 -- Support -- 11,195.38.

The Nifty Put Call Ratio (PCR) finally stood at (1.58) for July month contract. The top five scrips with highest PCR on Infosys (1.42), Mahindra & Mahindra (1.21), Piramal Enterprises (1.19), Bajaj Auto (1.18) and HCL Technologies (1.15).

Among most active underlying, Reliance Industries witnessed an addition of 3.05 million units of Open Interest in the July month futures contract, followed by ICICI Bank witnessing an addition of 18.76 million units of Open Interest in the July month contract, Bajaj Finance witnessed a contraction of 0.56 million units of Open Interest in the July month contract, Infosys witnessed an addition of 2.89 million units of Open Interest in the July month contract and Tata Consultancy Services witnessed a contraction of 0.60 million units of Open Interest in the July month future contract (Provisional).