Nifty ends flat with positive bias

The local benchmark, Nifty consolidated and ended the choppy day of trade on a flat note with positive bias. The index opened in the green as investors got confidence from Finance Minister Arun Jaitley’s statement where he pitched for a rate cut by the RBI. Some support also came as the Union Cabinet cleared ordinance on Land Acqusition Act including removal of consent clause for acquiring land for five areas of industrial corridors, PPP projects, rural infrastructure, affordable housing, and defence. However, profit booking emerged at higher levels as traders turned cautious with the Reserve Bank of India’s (RBI) Financial Stability Report (FSR), stating that risks to India’s banking system continue to remain at elevated levels on concerns of further deterioration in the asset quality. The central bank has warned that banks’ bad loans will worsen if economy falters further. Market, for rest of the session, traded in the tight range as investors remained sideways in the absence of any significant trigger at domestic front. Eventually, Nifty ended the session slightly in the positive terrain with a gain of nearly two points.

Most of the sectoral indices on the NSE settled in the positive territory with CNX PSU Bank gaining the most, up 2.94% followed by Bank Nifty up by 0.64% and CNX Finance up by 0.52% while CNX Metal down by 1.07% and CNX Energy down by 0.95% were remained the top losers in the trade.

The top gainers from the F&O segment were Adani Ports and Special Economic Zone, Adani Enterprises and Andhra Bank. On the other hand, the top losers were Unitech, Jaiprakash Associates and JSW Steel. In the index options segment, maximum OI continues to be seen in the 8400-8600 calls and 8000-8200 puts indicating the expected trading range. Meanwhile, India VIX - the gauge of underlying volatility in the market - has risen in today's session, which shows that traders are buying more options contracts as insurance against declines in the market.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 1.92% and reached 14.86. The 50-share CNX Nifty increased by 1.95 points or 0.02% to settle at 8,248.25. Nifty January 2015 futures closed at 8317.95 on Tuesday at a premium of 69.70 points over spot closing of 8248.25, while Nifty February 2015 futures ended at 8373.25 at a premium of 125 points over spot closing. Nifty January futures saw addition of 0.22 million (mn) units, taking the total outstanding open interest (OI) to 21.31 mn units. The near month derivatives contract will expire on January 29, 2015.

From the most active contracts, Yes Bank January 2015 futures traded at a premium of 2.05 points at 769.65 compared with spot closing of 767.60. The number of contracts traded were 19,285.

State Bank of India January 2015 futures traded at a premium of 3.40 points at 313.15 compared with spot closing of 309.75. The number of contracts traded were 17,919.

Adani Ports January 2015 futures traded at a premium of 1.75 points at 317.75 compared with spot closing of 316.00. The number of contracts traded were 16,334.

Tata Steel January 2015 futures traded at a premium of 3.30 points at 399.60 compared with spot closing of 396.30. The number of contracts traded were 14,957.

Reliance Industries January 2015 futures traded at a premium of 9.50 points at 889.65 compared with spot closing of 880.15. The number of contracts traded were 13,567.

Among Nifty calls, 8400 SP from the January month expiry was the most active call with an addition of 0.10 million open interests. Among Nifty puts, 8,200 SP from the January month expiry was the most active put with an addition of 0.50 million open interests. The maximum OI outstanding for Calls was at 8400 SP (3.55 mn) and that for Puts was at 8,000 SP (5.24 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8270.82--- Pivot Point 8245.68--- Support --- 8223.12.

The Nifty Put Call Ratio (PCR) finally stood at 1.33 for January month contract. The top five scrips with highest PCR on OI were Apollo Hospitals Enterprise (1.73), IndusInd Bank (1.26), Maruti Suzuki (1.16), Century Textiles & Industries (1.06) and Bajaj-Auto (1.05). 

Among most active underlying, State Bank of India witnessed an addition of 0.76 million of Open Interest in the January month futures contract, followed by Yes Bank witnessing an addition of 0.83 million of Open Interest in the January month contract; Adani Ports and Special Economic Zone witnessed an addition of 1.20 million of Open Interest in the January month contract, Reliance Industries witnessed an addition of 0.55 million of Open Interest in the January month contract and ICICI Bank witnessed an addition of 1.29 million of Open Interest in the January month's future contract.