Nifty ends higher on Monday

Indian equity benchmark Nifty closed higher on Monday. The index started the day on a positive note and traded with traction for the most part of the trading session, as Prime Minister Narendra Modi launched a financing facility of Rs 1 lakh crore under the Agri-Infra Fund that will help create post-harvest infrastructure in villages and generate jobs. Market participants took support with Commerce and Industry Minister Piyush Goyal’s statement that the world is looking for trusted partners where there is rule of law, transparency in systems, strong judiciary and democratic traditions, and India can become a key player in global supply chains as it provides all of these.

Market cut its gains in late afternoon deals but settled in green, amid private reports stating that despite several businesses remaining closed during the lockdown, 81 per cent of micro enterprises polled are confident of a recovery post COVID-19 whereas 57 per cent reported not having any cash reserves to survive. Initial results of a six-month survey that is underway by GAME (Global Alliance for Mass Entrepreneurship) in association with LEAD at Krea University covering 1,500 micro enterprises also reveal that 40 per cent tried to borrow money to cover expenses. However, only 14 per cent of the overall borrowing was from formal borrowing sources.

All of the NSE sectoral indices ended in green. The top gainers from the F&O segment were Divi’s Laboratories, Cipla and Bharat Electronics. On the other hand, the top losers were Container Corporation of India, RBL Bank and Muthoot Finance. 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 0.12 and reached 22.45. The 50 share Nifty up by 56.10 points or 0.50% to settle at 11,270.15.

Nifty August 2020 futures closed at 11294.00 (LTP) on Monday, at a premium of 23.85 points over spot closing of 11270.15, while Nifty September 2020 futures ended at 11302.00 (LTP), at a premium of 31.85 points over spot closing. Nifty August futures saw an addition of 0.12 million (mn) units, taking the total outstanding open interest (OI) to 10.47 mn units. The near month derivatives contract will expire on August 27, 2020 (Provisional).

From the most active contracts, Cipla August 2020 futures traded at a discount of 4.20 points at 797.70 (LTP) compared with spot closing of 801.90. The numbers of contracts traded were 43,862 (Provisional).

Bajaj Finance August 2020 futures traded at a premium of 7.55 points at 3434.05 (LTP) compared with spot closing of 3426.50. The numbers of contracts traded were 30,481 (Provisional).

Reliance Industries August 2020 futures traded at a discount of 11.05 points at 2121.60 (LTP) compared with spot closing of 2132.65. The numbers of contracts traded were 29,999 (Provisional).

ICICI Bank August 2020 futures traded at a discount of 2.10 points at 364.20 (LTP) compared with spot closing of 366.30. The numbers of contracts traded were 29,663 (Provisional).

SBIN August 2020 futures traded at a discount of 1.10 points at 193.75 (LTP) compared with spot closing of 194.85. The numbers of contracts traded were 26,281(Provisional).

Among, Nifty calls, 11500 SP from the August month expiry was the most active call with a contraction of 0.10 million open interests. Among Nifty puts, 11000 SP from the August month expiry was the most active put with almost unchanged open interests. The maximum OI outstanding for Calls was at 11500 SP (2.11 mn) and that for Puts was at 11000 SP (3.06 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,325.63 -- Pivot Point 11,281.82 -- Support -- 11,226.33.

The Nifty Put Call Ratio (PCR) finally stood at (1.60) for August month contract. The top five scrips with highest PCR on Divi’s Laboratories (1.41), Jindal Steel (1.24), Tata Consumer Products (1.20), Tata Motors (1.19) and Jindal Steel (1.07).

Among most active underlying, Cipla witnessed an addition of 2.37 million units of Open Interest in the August month futures contract, followed by Reliance Industries witnessing an addition of 0.84 million units of Open Interest in the August month contract, Bajaj Finance witnessed an addition of 0.69 million units of Open Interest in the August month contract, Lupin witnessed an addition of 0.33 million units of Open Interest in the August month contract and Aurobindo Pharma witnessed an addition of 1.31 million units of Open Interest in the August month future contract (Provisional).