Nifty fails to erase all losses; ends below 11300 mark

Indian equity benchmark Nifty50 recovered from day’s low point, but failed to erase all losses and ended in red terrain. Index made negative start, with report that the clinical trials for the Covid-19 vaccine candidate developed by the University of Oxford, which was expected to start at PGIMER in Chandigarh, have been delayed by at least a week over safety approvals. Market extended downside after Fitch Ratings in its latest report has sharply lowered its forecast for India's gross domestic product (GDP) growth for the current fiscal year (FY21) to (-) 10.5 percent from (-) 5 percent estimated earlier. It pointed out that the continued spread of the virus and the imposition of sporadic shutdowns across the country depress sentiment and disrupts economic activity.

In afternoon trade, Nifty touched its intraday low point but soon market trimmed some of its losses, as traders took some solace with private report that the Indian economy is expected to climb from a deeper trough in the calendar year 2020 (CY20) and see a stronger rebound in the year 2021. However, market continued its trade below neutral line till the end of the session amid a private report that the Indian economy is the worst-hit among major economies, American brokerage Goldman Sachs said sharply cutting its 2020-21 GDP forecast to a contraction of 14.8 per cent. Finally, Nifty closed the session below 11300 mark.

Traders were seen piling up positions in Pharma, Metal and Media, while selling was witnessed in PSU Bank, Private Bank and Financial Services. The top gainers from the F&O segment were Escorts, Tata Steel and Amara Raja Batteries. On the other hand, the top losers were SBIN, Container Corporation of India and Shriram Transport Finance. 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 decreased by 2.92% and reached 22.06. The 50 share Nifty down by 39.35 points or 0.35% to settle at 11,278.00.

Nifty September 2020 futures closed at 11317.75 (LTP) on Wednesday, at a premium of 39.75 points over spot closing of 11278.00, while Nifty October 2020 futures ended at 11334.15 (LTP), at a premium of 56.15 points over spot closing. Nifty September futures saw an addition of 5,686 units, taking the total open interest (Contracts) to 1,46,281. 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 9.45 points at 2173.00 (LTP) compared with spot closing of 2163.55. The numbers of contracts traded were 72,384 (Provisional).

SBIN September 2020 futures traded at a premium of 0.80 points at 196.50 (LTP) compared with spot closing of 195.70. The numbers of contracts traded were 29,758 (Provisional).

Axis Bank September 2020 futures traded at a premium of 2.05 points at 434.25 (LTP) compared with spot closing of 432.20. The numbers of contracts traded were 28,177 (Provisional).

Bajaj Finance September 2020 futures traded at a premium of 7.55 points at 3437.55 (LTP) compared with spot closing of 3430.00. The numbers of contracts traded were 25,888 (Provisional).

Tata Steel September 2020 futures traded at a premium of 1.55 points at 421.10 (LTP) compared with spot closing of 419.55. The numbers of contracts traded were 24,474 (Provisional).

Among, Nifty calls, 11500 SP from the September month expiry was the most active call with an addition of 4,216 units open interests. Among Nifty puts, 11000 SP from the September month expiry was the most active put with a contraction of 2,106 units open interests. The maximum OI outstanding for Calls was at 11500 SP (31,097 units) and that for Puts was at 11000 SP (37,665 units). The respective Support and Resistance levels of Nifty are: Resistance 11,348.62 -- Pivot Point 11,266.88 -- Support --- 11,235.62.

The Nifty Put Call Ratio (PCR) finally stood at (1.24) for September month contract. The top five scrips with highest PCR on Vedanta (1.19), JSW Steel (1.10), Ramco Cements (0.98) and Jubilant FoodWorks (0.92).

Among most active underlying, Reliance Industries witnessed an addition of 1,133 units of Open Interest in the September month futures contract, followed by Bajaj Finance witnessing an addition of 653 units of Open Interest in the September month contract, Bharti Airtel witnessed an addition of 3,124 units of Open Interest in the September month contract, SBIN witnessed an addition of 4,614 units of Open Interest in the September month contract and Escorts witnessed an addition of 298 units of Open Interest in the September month future contract. (Provisional).