Index Options | Stock Market Today by Ripples Advisory – 3rd June 2019

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An Escalation In U.S.-China Trade Conflict And Announcement Of 5% Tariff On Mexican Goods Imported Into The U.S May Put Global Markets In Pressure

Markets began the week largely on the back foot in the wake of trade-war jitters from the U.S. moves against Mexico and India to China’s retaliation against American measures.

U.S. announced a 5% tariff on Mexican goods imported into the U.S. and stated that the rate will increase gradually if Mexico does not make efforts to stop illegal immigration of people into the U.S.

India became the latest country to be targeted by the Trump administration Friday evening, eliminating the country’s eligibility to export a number of products to the U.S. duty-free.

Nifty has already started taking resistance of 12050 levels, last week Nifty made a high of 12039 and closed at 11923 after making a low of 11812 levels.

With ongoing trade tension, we suggest investors be cautious in the market.

Sector Analysis
The major sectors which rallied Last week are CHEMICAL (3.46%), Energy-Oil & Gas (2.75%), Fertilizers (2.55%), and Realty (2.35%).

The minor sectors which performed well in the Last week are Electrical equipment (4%), Transportation Logistics (3%), Films (3 %), Healthcare Services (3%) and Telecom (3%).

As these sectors showed strength in the market, one should keep an eye on these sectors as probably rally in these sectors may continue further for coming weeks if the markets also remain on the upside.

Sectors which may be impacted by GSP trade program are pharmaceuticals and surgical, Agricultural goods, plastic, and plastic-based articles, Leather articles (other than footwear) and Imitation Jewellery.

The US 10 Year T-Note is trading at 126.91. The Bond has crucial support at 117.42 made on 5th Nov 2018. The US Dollar Index is trading at 97.537.

Open Interest Analysis:
FII & PRO are the major players in the Derivatives segment and have an upper hand in the market and their position provides direction to the market. In the May month expiry, they have started with the position of (-30212) contracts in Index option (both FII & PRO combined) when Nifty spot was trading at 11945. Till Friday, they had Net Open Interest position of (-81460) contracts for the June expiry. Thus, if we calculate from expiry till Friday they have created a short position and sold 51248 contracts in the June month Expiry. For further detail check the Open Interest table below

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