Nifty prolongs consolidation for second straight session

The fifty stock index -- Nifty –prolonged the lull for second straight day and finished the session on a dull note, marginally above the neutral line as traders turn cautious ahead of the expiry of February derivative contracts while the Railway Budget and Union Budget kept risk-appetite subdued. Sentiments got pressured after Global rating agency Moody's underscored that fiscal policies and structural reforms would determine India's sovereign credit profile, and not recent revisions to the economic growth data. Furthermore, there will be some concern as well, with the 14th Finance Commission suggesting a fiscal deficit target of 3.6 percent of GDP in 2015-16 and 3 percent in the subsequent years on the back of likely pick-up in economic growth. Also, as a Business Confidence Survey by the Federation of Indian Chambers of Commerce and Industry (Ficci) showed a marginal dip in the proportion of respondents anticipating 'moderately to substantially better' performance over the near-term at economy, industry and company level. However, losses remained capped as overseas investors bought Indian shares worth Rs 697 crore ($112.3 million) on Tuesday, buying shares worth $884.34 million for the fourth straight session. Some support also came with Finance Minister Arun Jaitley’s statement that the government is committed to work for the betterment of every citizen.

Earlier, domestic index Nifty got off to a rollicking opening as investors rejoiced US Federal Reserve Chair Janet Yellen's testimony that Fed would not be rushing to hike interest rates. Thereafter, market traded in the tight range till mid afternoon trade lingering near its higher level but, it was the final hour of trade where market witnessed steep fall of about 70 points as investors turned cautious and booked profits ahead of Rail Budget and February F&O expiry which is due tomorrow. However, some last minute short covering help index to conclude session in the positive territory with modest gains of five points. Most of the sectoral indices on the NSE settled in the negative territory with CNX Pharma loosing the most, ending with a loss of 1.12 present followed CNX Media down by 1.08 present and Bank Nifty down by 0.80 present, while CNX IT up 0.53 present, CNX Realty up 0.35 present and CNX FMCG up by 0.28 present remained the top gainers on NSE sectoral space.

The top gainers from the F&O segment were Siemens, Jain Irrigation Systems and LIC Housing Finance. On the other hand, the top losers were Apollo Hospitals Enterprise, Havells India and Tata Chemicals. Meanwhile, Nifty Future Rollover continues to remain higher than 3M average due to large short hedges created in last few trades. Sectorally, FMCG, oil & gas and telecom stocks were witnessing high rollover of positions while stocks from the finance, textile and automobile space were witnessing relatively low rolls into the March series. In the index options segment for February series, maximum OI continues to be seen in the 9000-8900 calls and 8800-8700 puts indicating the expected trading range.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 3.60% and reached 20.77. The 50-share CNX Nifty was up by 5.15 points or 0.06% to settle at 8,767.25.  Nifty February 2015 futures closed at 8767.15 on Wednesday at a premium of 5.05 points over spot closing of 8762.10, while Nifty March 2015 futures ended at 8815.95 at a premium of 53.85 points over spot closing. Nifty February futures saw contraction of 3.34 million (mn) units, taking the total outstanding open interest (OI) to 9.36 million (mn) units. The near month derivatives contract will expire on February 26, 2015.

From the most active contracts, Reliance Industries February 2015 futures traded at a premium of 1.10 points at 844.25 compared with spot closing of 843.15. The number of contracts traded were 40,408.

Reliance Industries March 2015 futures traded at a premium of 7.35 points at 850.50 compared with spot closing of 843.15. The number of contracts traded were 36,186.

HDFC Bank March 2015 futures traded at a premium of 0.90 points at 1053.35 compared with spot closing of 1052.45. The number of contracts traded were 34,642.

SBI February 2015 futures traded at a premium of 0.25 points at 295.80 compared with spot closing of 295.55. The number of contracts traded were 33,286.

HDFC Bank February 2015 futures traded at a premium of 11.75 points at 1064.20 compared with spot closing of 1052.45. The number of contracts traded were 33,110.Among Nifty calls, 8800 SP from the February month expiry was the most active call with an addition of 0.53 million open interests. Among Nifty puts, 8800 SP from the February month expiry was the most active put with a contraction of 0.15 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.29 mn) and that for Puts was at 8,700 SP (5.02 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8821.47--- Pivot Point 8786.43--- Support --- 8732.22.

The Nifty Put Call Ratio (PCR) finally stood at 0.91 for February month contract. The top five scrips with highest PCR on OI were Siemens (1.49), TCS (1.37), ACC (1.32), Syndicate Bank (1.31) and Sun TV (1.31). 

Among most active underlying, State Bank of India witnessed a contraction of 14.84 million of Open Interest in the February month futures contract, followed by ICICI Bank witnessing a contraction of 12.86 million of Open Interest in the February month contract; Infosys witnessed a contraction of 12.63 million of Open Interest in the February month contract, Reliance Industries witnessed a contraction of 6.11 million of Open Interest in the February month contract and HDFC Bank witnessed a contraction of 4.04 million of Open Interest in the February month's future contract.