WHAT LIES AHEAD : NEAR-TERM PICTURE
SPOT NIFTY : The key Indian benchmarks sustained an upsurge, but with cautious steps ahead of the US-China meet on trade war negotiations. Even the recently held Federal Reserve meeting signalled rate hike in the near term to counter the economic boom, with the inflation rate expected to rise persistently above the 2% target. The global currencies, including the rupee, had mostly witnessed depreciation ahead of the talks and Fed’s signals. Even on the commodities front, the trade war concerns dragged down the global copper price, thereby pressurising metal and mining stocks. This time around, the broader market indices were a mixed bag with the Mid-cap index outperforming the key benchmarks, while the Small-cap underperformed. Nevertheless, all indices gained more than 1 per cent. On the sectoral front, FMCG and Power sectors led the pack, gaining more than 3 per cent each. All other sectors ended in the green too, but Bankex and Realty remained subdued with marginal gains. Technically, Indian benchmark index Nifty gave a consolidation breakout at the higher level of 11495 and has sustained above this level on a weekly closing basis, registering probably the fifth consecutive weekly uptick for the Nifty. On the daily time frame, Nifty gave a gap-up opening on August 23, but being an open-high at 11620.70, it witnessed intra-day correction. Hence, going forward, if 11670 is broken on the upside, we hold 11750-11775 as the next resistance, followed by 12000 as the medium-term resistance. However, an upside movement with baby steps and oscillators in the overbought zone can cue some correction. Hence, if Nifty falls below 11550, 1148011440 will act as supports, followed by 11340, which will act as provisional trend reversal.
NIFTY DERIVATIVES: The Indian Volatility Index (VIX), a gauge for market’s short term expectation of volatility, dipped 1.16 per cent to 12.75. Nifty August 2018 future last price stood at 11,596 at a premium of 13.25 points over the spot closing of 11,582.75. Nifty September 2018 future last price stood at 11,635.95 at a premium of 53.25 point over the spot closing of 11,582.70. The Nifty Put-Call Ratio (PCR) Open Interest-wise stood at 1.61 for August month contract. Among Nifty Calls, 11,600 Strike Price from the August month expiry was the most active Call. Among Nifty Puts, 11,500 Strike Price from the August month expiry was the most active Put. For the August series, the maximum OI outstanding for Puts was at 11,500 strike price and that for Calls, it was at 11,600 strike price.