Nifty extends southbound journey

S&P CNX -- Nifty -- extended its southbound journey on last trading day of the week and ended the trade with marginal losses. Earlier market made cautious start, but soon entered above its neutral line, as traders took support with Union Minister Nitin Gadkari’s statement that micro, small and medium enterprises (MSMEs) are the backbone of the Indian economy and can help in boosting exports. He said ‘we are giving highest priority for how we can reduce our import and increase our exports’. However, market failed to protect its gains and slipped into negative territory, as government data showed that contracting for the seventh consecutive month, the output of eight core infrastructure sectors dropped by 0.8 percent in September, mainly due to decline in production of crude oil, natural gas, refinery products and cement. The production of eight core sectors had contracted 5.1 percent in September 2019.

Further, index extended its down side, as the World Bank said remittances to India would fall this year by nine per cent to $76 billion due to the ongoing coronavirus pandemic and global economic recession. India followed by China, Mexico, Philippines, and Egypt continue to be the top five countries in 2020 to receive foreign remittances. However, market trimmed most of it loss with private report that India is working to offer production-linked incentives to more sectors to boost domestic manufacturing. Meanwhile, the Cabinet will soon consider approving such incentives for more sectors.

Traders were seen piling positions in IT, Media and Pharma sector while selling was witnessed in Bank, Auto and FMGC sector stocks. The top gainers from the F&O segment were Cholamandalam Investment and Finance, TVS Motor Company and Vodafone Idea. On the other hand, the top losers were Bharti Airtel, MRF and Hero Motocorp. In the index option segment, maximum OI continues to be seen in the 11,700 - 12,500 calls and 10,900 - 11,800 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 3.03% and reached 24.75.The 50 share Nifty down by 28.40 points or 0.24% to settle at 11,642.40.

Nifty November 2020 futures closed at 11639.95 (LTP) on Friday, at a discount of 2.45 points over spot closing of 11642.40, while Nifty December 2020 futures ended at 11658.00(LTP) , at a premium of 15.60 points over spot closing.  Nifty November futures saw an addition of 20,571 units, taking the total outstanding open interest (Contracts) to 1,53,833 units. The near month derivatives contract will expire on November 26, 2020 (Provisional).

From the most active contracts, Reliance Industries November 2020 futures traded at a premium of 4.65 points at 2069.00 (LTP) compared with spot closing of 2064.35. The numbers of contracts traded were 53,957 (Provisional).

ICICI Bank November 2020 futures traded at a premium of 1.25 points at 394.75 (LTP) compared with spot closing of 393.50. The numbers of contracts traded were 32,950 (Provisional).

SBIN November 2020 futures traded at a premium of 0.70 points at 190.60 (LTP) compared with spot closing of 189.90. The numbers of contracts traded were 22,545 (Provisional).

Axis Bank November 2020 futures traded at a premium of 1.05 points at 492.05 (LTP) compared with spot closing of 491.00. The numbers of contracts traded were 22,325 (Provisional).

Bharti Airtel November 2020 futures traded at a premium of 1.65 points at 434.40 (LTP) compared with spot closing of 432.75. The numbers of contracts traded were 21,786 (Provisional).

Among, Nifty calls, 12000 SP from the November month expiry was the most active call with an addition of 1,607 units open interests. Among Nifty puts, 11000 SP from the November month expiry was the most active put with an addition of 1,054 units open interests. The maximum OI outstanding for Calls was at 12000 SP (20,953 units) and that for Puts was at 11000 SP (29,467 units). The respective Support and Resistance levels of Nifty are: Resistance 11,749.08 -- Pivot Point 11,642.27 -- Support -- 11,535.58.

The Nifty Put Call Ratio (PCR) finally stood at (1.60) for November month contract. The top five scrips with highest PCR on Bosch (3.00), ICICI Lombard General Insurance (2.60), Bharti Infratel (1.17), Cummins India (0.99) and Balkrishna Industries (0.96).

Among most active underlying, Reliance Industries witnessed an addition of 3,478 units of Open Interest in the November month futures contract followed by ICICI Bank witnessed an addition of 4,818 units of Open Interest in the November month futures contract, Bharti Airtel witnessed an addition of 886 units of Open Interest in the November month futures contract, Bajaj Finance witnessed an addition of 1,356 units of Open Interest in the November month futures contract and Axis Bank witnessed an addition of 986 units of Open Interest in the November month futures contract (Provisional).