Nifty recaptures 10,200 level; breaks 4 day losing streak

Nify50 barometer recaptured 10,200-level by posting gains of over 75 points, after four sessions of losses as the rupee recovered against the US currency. Barring Pharma, all other sectors ended in green. The Index made a strong start as traders took encouragement with a report stating that government is responding well to the rising trade tensions between the world's two largest economies, maintaining a stance that serves the cause of Indian exporters best. Market turned volatile and entered into negative terrain, as market participants were concerned with private report stating that liquidity crunch may hurt economic growth. The report penciling in a few basis points shave off in economic growth in the December quarter if the hoarding of cash by banks and mutual funds continue threatening on-lending non-banking finance companies, the lifeline of lakh of medium and small enterprises.

However, the market started gaining traction in the dying hour of trade, as traders were taking note of Directorate General of Foreign Trade’s (DGFT) statement that India relaxed some restrictions on imports of petcoke for use as feedstock in some industries. Traders ignored a private report which stated that the Indian growth story has been far from perfect. That is not an understatement by any stretch of imagination. A growing challenge for the economy is the fast-evolving problem of inequality. Besides, Private Equity (PE) investments moderated to $14.60 billion during January-September period, owing to macroeconomic concerns, market volatility and valuations of companies.

All the sectoral indices ended in green on the NSE except Pharma. The top gainers from the F&O segment were Can Fin Homes, Bajaj Finance and Multi Commodity Exchange of India. On the other hand, the top losers were Cadila Healthcare, Bajaj Auto and Yes Bank. In the index option segment, maximum OI continues to be seen in the 10,800-11,200 calls and 9,900 -10,200 puts indicating this is the trading range expectation.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 0.83% and reached 18.88. The 50-share Nifty was up by 77.95 points or 0.77% to settle at 10,224.75.

Nifty October 2018 futures closed at 10228.55 on Wednesday, at a premium of 3.80 points over spot closing of 10224.75, while Nifty November 2018 futures ended at 10272.10, at a premium of 47.35 points over spot closing. Nifty October futures saw a contraction of 3.98 million (mn) units, taking the total outstanding open interest (OI) to 9.10 mn units. The near month derivatives contract will expire on October 25, 2018.

From the most active contracts, Bajaj Finance October 2018 futures traded at a discount of -32.90 points at 2299.80 compared with spot closing of 2332.70. The numbers of contracts traded were 53,784.

Yes Bank October 2018 futures traded at a discount of -0.15 points at 204.20 compared with spot closing of 204.35. The numbers of contracts traded were 37,172.

Indiabulls Housing Finance October 2018 futures traded at a discount of -10.45 points at 734.55 compared with spot closing of 745.00. The numbers of contracts traded were 33,159.

Reliance Industries October 2018 futures traded at a discount of -2.10 points at 1046.90 compared with spot closing of 1049.00. The numbers of contracts traded were 31,716.

ICICI Bank October 2018 futures traded at a premium of 1.55 points at 323.50 compared with spot closing of 321.95. The numbers of contracts traded were 28,564.

Among Nifty calls, 10300 SP from the October month expiry was the most active call with an addition of 0.19 million open interests. Among Nifty puts, 10,100 SP from the October month expiry was the most active put with an addition of 0.24 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (3.32mn) and that for Puts was at 10,000 SP (4.27mn). The respective Support and Resistance levels of Nifty are: Resistance 10,301.37 ---- Pivot Point 10,214.03 --- Support --- 10,137.42.

The Nifty Put Call Ratio (PCR) finally stood at 0.74 for October month contract. The top five scrips with highest PCR on OI were Page Industries (4.00), Bosch (2.00), Berger Paints India (1.57), Bharti Infratel (1.34) and Equitas Holdings (1.34).

Among most active underlying, Reliance Industries witnessed a contraction of 7.98 million units of Open Interest in the October month futures contract, followed by Bajaj Finance witnessing a contraction of 1.96 million units of Open Interest in the October month contract, ICICI Bank witnessed a contraction of 20.14 million units of Open Interest in the October month contract, State Bank of India witnessed a contraction of 18.29 million units of Open Interest in the October month contract and HDFC Bank witnessed a contraction of 2.69 million units of Open Interest in the October month future contract.