Nifty ends in deep red terrain on Friday

Indian equity benchmark Nifty ended in deep red terrain on Friday. After a positive start, index remained in green terrain for the most part of the session, taking support with Finance Minister Nirmala Sitharaman’s statement that the faceless tax scrutiny assessment and appeal system would help ease compliance burden of taxpayers and increase fairness and objectivity in the tax system. She noted that the government has launched the platform 'Transparent Taxation - Honoring the Honest' which provides for launch of faceless assessment and adoption of a taxpayer charter. Traders remained positive, as Commerce and Industry Minister Piyush Goyal held a meeting with various industry associations to discuss ways to reduce imports in the automobile industry and increase localisation of auto components. The ministry is working to push local manufacturing in several other sectors, including furniture and ACs, and reduce imports from countries like China. However, in late afternoon session, market fell sharply to close on a negative note, with the data released by the National Statistics Office (NSO) showing that India's retail inflation as measured by the Consumer Price Index (CPI) increased to 6.93 percent in the month of July as food prices continued to soar due to disrupted supply chains.

All of the NSE sectoral indices ended in red except Pharma and Metal. The top gainers from the F&O segment were Lupin, Muthoot Finance and Glenmark Pharmaceuticals. On the other hand, the top losers were Eicher Motors, Balkrishna Industries and Tata Motors. 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 increased by 5.83% and reached 21.76. The 50 share Nifty down by 122.05 points or 1.08% to settle at 11,178.40.

Nifty August 2020 futures closed at 11186.15 (LTP) on Friday, at a premium of 7.75 points over spot closing of 11178.40, while Nifty September 2020 futures ended at 11202.60 (LTP), at a premium of 24.20 points over spot closing. Nifty August futures saw an addition of 0.49 million (mn) units, taking the total outstanding open interest (OI) to 10.73 mn units. The near month derivatives contract will expire on August 27, 2020 (Provisional).

From the most active contracts, Reliance Industries August 2020 futures traded at a premium of 7.00 points at 2119.00 (LTP) compared with spot closing of 2112.00. The numbers of contracts traded were 49,755 (Provisional).

Tata Steel August 2020 futures traded at a premium of 1.50 points at 419.40 (LTP) compared with spot closing of 417.90. The numbers of contracts traded were 39,091 (Provisional).

Axis Bank August 2020 futures traded flat at 436.30 (LTP) compared with spot closing of 436.30. The numbers of contracts traded were 35,198 (Provisional).

Lupin August 2020 futures traded at a premium of 3.85 points at 1017.85 (LTP) compared with spot closing of 1014.00. The numbers of contracts traded were 34,646 (Provisional).

ICICI Bank August 2020 futures traded at a discount of 0.10 points at 360.80 (LTP) compared with spot closing of 360.90. The numbers of contracts traded were 32,554 (Provisional).  

Among, Nifty calls, 11500 SP from the August month expiry was the most active call with a contraction of 0.06 million open interests. Among Nifty puts, 11000 SP from the August month expiry was the most active put with an addition of 0.10 million open interests. The maximum OI outstanding for Calls was at 11500 SP (2.27 mn) and that for Puts was at 11000 SP (3.37 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,325.95 -- Pivot Point 11,218.70 -- Support --- 11,071.15.

The Nifty Put Call Ratio (PCR) finally stood at (1.48) for August month contract. The top five scrips with highest PCR on Ashok Leyland (1.62), JSW Steel (1.53), Motherson Sumi Systems (1.51), Vedanta (1.12) and Bharat Forge (1.10).

Among most active underlying, Reliance Industries witnessed a contraction of 0.64 million units of Open Interest in the August month futures contract, followed by Lupin witnessing an addition of 0.97 million units of Open Interest in the August month contract, Tata Steel witnessed an addition of 1.64 million units of Open Interest in the August month contract, SBIN witnessed an addition of 4.94 million units of Open Interest in the August month contract and Larsen & Toubro witnessed an addition of 0.18 million units of Open Interest in the August month future contract (Provisional).