Nifty resumes northward journey

The local benchmark -- Nifty -- resumed its northward journey and ended day’s trade slightly in green terrain. Market made cautious start and traded below neutral line after Nobel Laureate Abhijit Banerjee said India is among the worst performing economies in the world and the government’s economic stimulus was inadequate to tackle the problem. But, he said that the country will see a revival in growth in the July-September quarter of the current fiscal. He said the country's economic growth was slowing down even before the Covid-19 pandemic hit. However, market managed to cut losses and entered into green zone, as Reserve Bank of India (RBI) extended by six months the additional flexibility provided to states to raise funds through market borrowing and overdraft. The RBI in April provided additional flexibility to states and Union Territories (UTs) to raise funds to deal with the Covid-19 crisis. The flexibility was available till September 30, 2020.Trders ignored private report stated that the steady rise in caseloads and the spillover effects of the strict lockdown measures will continue to undermine economic growth in the country. It said even if the growth takes the form of a V-shape, the level of Gross Domestic Product (GDP) will matter. Index protected its gains till the end of the session and closed the session above 11200 level. 

Traders were seen piling positions in Bankex, FMGC and IT sector while selling was witnessed in Auto, Metal and PSU Bank sector stocks. The top gainers from the F&O segment were Torrent Pharmaceuticals, Apollo Hospitals Enterprise and Grasim Industries. On the other hand, the top losers were Bharat Petroleum Corporation, Steel Authority of India and Jindal Steel & Power. In the index option segment, maximum OI continues to be seen in the 11,000 - 12,000 calls and 10,000 - 10,900 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 0.42% and reached 19.69. The 50 share Nifty up by 25.15 points or 0.22% to settle at 11,247.55.

Nifty October 2020 futures closed at 11244.30 (LTP) on Wednesday, at a discount of 3.25 points over spot closing of 11247.55, while Nifty November 2020 futures ended at 11265.00 (LTP), at a premium of 17.45 points over spot closing. Nifty October futures saw an addition of 10,475 units, taking the total open interest (Contracts) to 1,25,656. The near month derivatives contract will expire on October 29, 2020 (Provisional).

From the most active contracts, Reliance Industries October 2020 futures traded at a premium of 5.25 points at 2236.25 (LTP) compared with spot closing of 2231.00. The numbers of contracts traded were 32,668 (Provisional).

BPCL October 2020 futures traded at a premium of 1.75 points at 353.50 (LTP) compared with spot closing of 351.75. The numbers of contracts traded were 29,919 (Provisional).

HDFC Bank October 2020 futures traded at a discount of 2.20 points at 1075.80 (LTP) compared with spot closing of 1078.00. The numbers of contracts traded were 25,412 (Provisional).

Bharti Airtel October 2020 futures traded at a premium of 1.65 points at 421.30 (LTP) compared with spot closing of 419.65. The numbers of contracts traded were 24,352 (Provisional).

ICICI Bank October 2020 futures traded at a premium of 1.05 points at 354.55 (LTP) compared with spot closing of 353.50. The numbers of contracts traded were 21,854 (Provisional).

Among, Nifty calls, 11500 SP from the October month expiry was the most active call with an addition of 524 units open interests. Among Nifty puts, 11000 SP from the October month expiry was the most active put with an addition of 2,939 units open interests. The maximum OI outstanding for Calls was at 11500 SP (24,557 units) and that for Puts was at 10500 SP (50,666 units). The respective Support and Resistance levels of Nifty are: Resistance 11,300.45 -- Pivot Point 11,242.50 -- Support -- 11,189.60.

The Nifty Put Call Ratio (PCR) finally stood at (1.34) for October month contract. The top five scrips with highest PCR on ICICI Prudential (1.16), Bajaj Finance (0.99), TCS (0.97), Vedanta (0.95) and Titan Company (0.89).

Among most active underlying, Reliance Industries witnessed an addition of 1,290 units of Open Interest in the October month futures contract, followed by Dr. Reddy's Laboratories witnessed an addition of 729 units of Open Interest in the October month contract, BPCL witnessed an addition of 3,679 units of Open Interest in the October month future contract, Bharti Airtel witnessed an addition of 2,601 units of Open Interest in the October month future contract and HDFC Bank witnessed an addition of 6,841 units of Open Interest in the October month future contract (Provisional).