Market Snapshot:


On concerns over domestic liquidity and lingering trade war tension between the US and China, Nifty continue to trade with corrective bias as the index declined for a third consecutive weeks to close down by 0.8% at 11724. The Nifty Midcap performed at par with the benchmark and closed down by 0.8% whereas the small cap index underperformed and closed lower by 2.6%.Brent Crude prices closed higher at about US$ 64.3/barrel as compared to previous week’s close of US$ 61.6/barrel and Bond yields ended lower at 6.83% as compared to previous week’s close of 6.92%.Gold prices closed higher at about $ 1409/ounce as compared to last week’s closing price of $ 1353/ounce.

Market View:

The Nifty June Fut closed 96 points or 0.83% lower at 11850. The Nifty June Fut closed at a premium of 29 points as against a premium of 18 points in the previous session. Nifty IV fell to 13.31% from 13.55% indicating volatility expectations. The Nifty OI PCR fell to 1.34 from 1.64 in the previous session, indicating there was more buildup of OI in the call segment. Implied volatility (IV) of Calls was up and closed at 12.50% vs 11.95% and Put IV options down and closed at 14.14% vs 15.05%.

On the options front, maximum Put OI for 27th June series is at 11,700 strike price with 32 lakh shares followed by 11,500 & 11,600 strike price. Meanwhile, maximum Call OI for 27th June series is at of 12,000 strike price with 47 lakh shares followed by 12200 & 11800 strike price .

MSCI Emerging equity market is on course to end on a positive note for a fourth consecutive week. The index is up over 3.5% this week in line with a rally seen in most risk assets. Yield cool off in US and a dovish Fed bode well for EM markets.

Technically, the Nifty strike wise PCR OI of 11,800 fell to 0.66 vs 1.33 and fresh call writing was seen at strike price 11,800 with 12 lakh share, all this indicating aggressive call writing , which is indicating a bearish movement for the indices. And last week saw muted FII flows, as India witnessed equity outflows of almost $40 million during the week while South Korea and Taiwan saw inflows of $120 million and $610 million, respectively. Now, if it sustains below the 11,700 level, then fresh selling pressure could drag it towards 11,650 and then 11,600 level, while on the upside, hurdles are seen at 11,800 and 11,850 levels.

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