Nifty ends marginally higher

Indian equity benchmark Nifty ended marginally higher on Friday. Index made a negative start of the trading day, as the Reserve Bank of India sounded a note of caution saying that protracted spread of the COVID-19 pandemic poses downside risk to the domestic economy which is expected to remain in the negative zone in the current fiscal (FY21). Market was volatile for the whole trading day, amid a private report stating that business optimism for the July-September quarter slumped to a record low due to sharp rise in COVID-19 cases, the extension of lockdown in containment zones and staggered easing of restrictions.

However, Nifty erased all its losses in the last hour of trade to close in green terrain, supported with Union Minister Jitendra Singh’s statement that India will be an important pillar of the post-coronavirus global economic recovery and that the road map for winning the battle against the pandemic lies in countries restarting the economy and strengthening cooperative federalism. Some support also came, as in a major relief to corporate and retail borrowers, the Reserve Bank permitted banks to go for a one-time restructuring of loans that are facing stress due to the COVID-19 crisis with a view to mitigating risks to financial stability. The restructuring will be allowed as per the prudential framework issued on June 7, 2019.

Traders were seen piling up positions in PSU Bank, PVT Bank and Metal, while selling was witnessed in IT, Pharma and Realty. The top gainers from the F&O segment were Vodafone Idea, Tata Consumer Products and SRF. On the other hand, the top losers were Lupin, Titan Company and HCL Technologies. In the index option segment, maximum OI continues to be seen in the 11,300 - 11,600 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 0.57 and reached 22.37. The 50 share Nifty up by 13.90 points or 0.12% to settle at 11,214.05.

Nifty August 2020 futures closed at 11229.10 (LTP) on Friday, at a premium of 15.05 points over spot closing of 11214.05, while Nifty September 2020 futures ended at 11235.00 (LTP), at a premium of 20.95 points over spot closing. Nifty August futures saw an addition of 0.33 million (mn) units, taking the total outstanding open interest (OI) to 10.54 mn units. The near month derivatives contract will expire on August 27, 2020 (Provisional).

From the most active contracts, Bajaj Finance August 2020 futures traded at a premium of 19.70 points at 3490.00 (LTP) compared with spot closing of 3470.30. The numbers of contracts traded were 42,023 (Provisional).

Reliance Industries August 2020 futures traded at a premium of 11.50 points at 2157.50 (LTP) compared with spot closing of 2146.00. The numbers of contracts traded were 33,331 (Provisional).

RBL Bank August 2020 futures traded at a premium of 0.70 points at 191.00 (LTP) compared with spot closing of 190.30. The numbers of contracts traded were 24,732 (Provisional).

ICICI Bank August 2020 futures traded at a premium of 0.85 points at 358.95 (LTP) compared with spot closing of 358.10. The numbers of contracts traded were 23,047 (Provisional).

SBIN August 2020 futures traded at a premium of 0.80 points at 191.65 (LTP) compared with spot closing of 190.85. The numbers of contracts traded were 19,825 (Provisional).

Among, Nifty calls, 11500 SP from the August month expiry was the most active call with an addition of 0.11 million open interests. Among Nifty puts, 11000 SP from the August 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 (2.21 mn) and that for Puts was at 11000 SP (3.38 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,249.95 -- Pivot Point 11,196.00 -- Support -- 11,160.10.

The Nifty Put Call Ratio (PCR) finally stood at (1.60) for August month contract. The top five scrips with highest PCR on Maruti Suzuki India (1.24), Tata Consumer Products (1.21), Tata Steel (1.09), Jindal Steel (1.06) and  Exide India (1.03).

Among most active underlying, Reliance Industries witnessed an addition of 1.48 million units of Open Interest in the August month futures contract, followed by Bajaj Finance witnessing an addition of 0.07 million units of Open Interest in the August month contract, Tata Consumer Products witnessed an addition of 3.37 million units of Open Interest in the August month contract, Lupin witnessed an addition of 0.06 million units of Open Interest in the August month contract and SBIN witnessed an addition of 1.31 million units of Open Interest in the August month future contract (Provisional).