Nifty ends flat with a negative bias

Indian equity benchmark Nifty ended flat with a negative bias on Wednesday. After a sluggish start of the day, index remained lower for the whole trading session, as the government data showed that industrial production declined by 16.6 percent in June, mainly due to lower output of manufacturing, mining, and power generation. According to the Index of Industrial Production (IIP) data, manufacturing sector production registered a decline of 17.1 percent, while the output of mining and power fell 19.8 percent and 10 percent, respectively. Some worries also came with Fitch Ratings’ statement that the Reserve Bank's scheme to allow lenders to recast loans will extend uncertainty over the banking sector's asset quality.

However, market staged recovery in noon deals to close marginally lower, amid private report stating that the Indian export sector is likely to witness a sharper recovery curve September-October onwards, which could be further strengthened by the holiday season in western countries in the following months. The third in a three-part series, report says that improvements in the June export numbers are definitely early signs of recovery in the economy. However, analysis of publicly available trade data and global economic trends in the last few months indicates this is likely a result of the fulfillment of delayed orders piled up due to the lockdown in India, starting late March.

Traders were seen piling up positions in PSU Bank, Media and Auto, while selling was witnessed in Pharma, Realty and Metal. The top gainers from the F&O segment were InterGlobe Aviation, Motherson Sumi Systems and Bosch. On the other hand, the top losers were Info Edge (India), Container Corporation of India 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 0.52 and reached 20.84. The 50 share Nifty down by 14.10 points or 0.12% to settle at 11,308.40.

Nifty August 2020 futures closed at 11314.75 (LTP) on Wednesday, at a premium of 6.35 points over spot closing of 11308.40, while Nifty September 2020 futures ended at 11325.00 (LTP), at a premium of 16.60 points over spot closing. Nifty August futures saw an addition of 0.53 million (mn) units, taking the total outstanding open interest (OI) to 10.79 mn units. The near month derivatives contract will expire on August 27, 2020 (Provisional).

From the most active contracts, SBIN August 2020 futures traded at a premium of 1.05 points at 204.55 (LTP) compared with spot closing of 203.50. The numbers of contracts traded were 71,267 (Provisional).

Reliance Industries August 2020 futures traded at a premium of 10.25 points at 2136.80 (LTP) compared with spot closing of 2126.55. The numbers of contracts traded were 37,094 (Provisional).

ICICI Bank August 2020 futures traded at a premium of 1.60 points at 367.30 (LTP) compared with spot closing of 365.70. The numbers of contracts traded were 29,194 (Provisional).

Bajaj Finance August 2020 futures traded at a discount of 8.00 points at 3413.00 (LTP) compared with spot closing of 3421.00. The numbers of contracts traded were 28,827 (Provisional).

Interglobe Aviation August 2020 futures traded at a premium of 4.85 points at 1039.30 (LTP) compared with spot closing of 1034.45. The numbers of contracts traded were 25,048 (Provisional). 

Among, Nifty calls, 11500 SP from the August month expiry was the most active call with a contraction of 0.04 million open interests. Among Nifty puts, 11000 SP from the August month expiry was the most active put with a contraction of 0.002 million open interests. The maximum OI outstanding for Calls was at 11500 SP (2.08 mn) and that for Puts was at 11000 SP (3.07 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,339.38 -- Pivot Point 11,291.02 -- Support -- 11,260.03.

The Nifty Put Call Ratio (PCR) finally stood at (1.53) for August month contract. The top five scrips with highest PCR on JSW Steel (1.46), Motherson Sumi Systems (1.27), Maruti Suzuki India (1.21), Tata Steel (1.13) and Tata Motors (1.12).

Among most active underlying, SBIN witnessed an addition of 12.89 million units of Open Interest in the August month futures contract, followed by Reliance Industries witnessing an addition of 1.29 million units of Open Interest in the August month contract, Bajaj Finance witnessed an addition of 0.42 million units of Open Interest in the August month contract, Aurobindo Pharma witnessed an addition of 0.78 million units of Open Interest in the August month contract and Bharti Airtel witnessed an addition of 3.05 million units of Open Interest in the August month future contract (Provisional).