Nifty ends lower on Tuesday

Selloff in the last leg of trade dragged Nifty below its crucial 11350 mark. After making cautious start, market traded near neutral line, as global credit rating agency Fitch revised India’s FY21 central government fiscal deficit forecast to 8.2 percent of GDP from 7.2 percent due to higher than anticipated willingness of govt to spend amid weak revenue collection. However, market added gains to trade in fine fettle, as traders took support with report that the Reserve Bank of India (RBI) announced a special round of simultaneous sale and purchase of government securities (G-Secs) for Rs 10,000 crore each, on September 10, 2020. It has released details of the sale and purchase of securities, which will be done using the multiple price auction method.

Market continued its trade in green zone till late afternoon session, as some comfort also came with industry chamber Assocham’s statement that the rate of decline in output of core segments of the economy has been arrested considerably in July 2020. In line with an evaluation by Assocham, cement, steel and coal, which suffered heavy declines in the first quarter, recovered significantly in July 2020, even though the annualised numbers reflect contraction. But, in last leg of trade, market failed to protect its gains and slipped into red zone to end the session at lower note.

All of the NSE sectoral indices ended in red except IT. The top gainers from the F&O segment were Indiabulls Housing Finance, ICICI Prudential Life Insurance and BPCL. On the other hand, the top losers were Vodafone Idea, Bharti Infratel and PVR. In the index option segment, maximum OI continues to be seen in the 11,400 - 11,600 calls and 10,900 - 11,100 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 3.25% and reached 22.72. The 50 share Nifty down by 37.70 points or 0.33% to settle at 11,317.35.

Nifty September 2020 futures closed at 11310.30 (LTP) on Tuesday, at a discount of 7.05 points over spot closing of 11317.35, while Nifty October 2020 futures ended at 11325.00 (LTP), at a premium of 7.65 points over spot closing. Nifty September futures saw a contraction of 0.20 million (mn) units, taking the total outstanding open interest (OI) to 10.54 mn units. The near month derivatives contract will expire on September 24, 2020 (Provisional).

From the most active contracts, Reliance Industries September 2020 futures traded at a premium of 6.95 points at 2113.95 (LTP) compared with spot closing of 2107.00. The numbers of contracts traded were 42,454 (Provisional).

Bharti Airtel September 2020 futures traded at a premium of 1.35 points at 498.80 (LTP) compared with spot closing of 497.45. The numbers of contracts traded were 28,269 Provisional).

ICICI Bank September 2020 futures traded at a discount of 0.85 points at 375.10 (LTP) compared with spot closing of 375.95. The numbers of contracts traded were 27,225 (Provisional).

TCS September 2020 futures traded at a premium of 0.40 points at 2347.10 (LTP) compared with spot closing of 2346.70. The numbers of contracts traded were 25,325 (Provisional).

Axis Bank September 2020 futures traded at a premium of 1.95 points at 444.60 (LTP) compared with spot closing of 442.65. The numbers of contracts traded were 23,042 (Provisional).

Among, Nifty calls, 11500 SP from the September month expiry was the most active call with an addition of 0.04 million open interests. Among Nifty puts, 11000 SP from the September month expiry was the most active put with an addition of 0.22 million open interests. The maximum OI outstanding for Calls was at 11500 SP (2.01 mn) and that for Puts was at 11000 SP (3.04 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,406.25 -- Pivot Point 11,348.35 -- Support -- 11,259.45.

The Nifty Put Call Ratio (PCR) finally stood at (1.31) for September month contract. The top five scrips with highest PCR on Vedanta (1.36), MRF (1.09), JSW Steel (1.08), Ramco Cements (1.05) and Jubilant FoodWorks (0.99).

Among most active underlying, Reliance Industries witnessed an addition of 0.83 million units of Open Interest in the September month futures contract, followed by Tata Consultancy Services witnessing an addition of 0.27 million units of Open Interest in the September month contract, Bharti Airtel witnessed an addition of 7.10 million units of Open Interest in the September month contract, Infosys witnessed an addition of 1.02 million units of Open Interest in the September month contract and Bajaj Finance witnessed an addition of 0.01 million units of Open Interest in the September month future contract. (Provisional).