Nifty ends in green on easing crude prices; reclaims 10,550 level

After hovering between green and red terrain, key equity benchmark -- Nifty -- recaptured its crucial 10,550 level, as a drop in global crude oil prices eased concerns about India’s current account deficit. The index made a caution start with report that industrial output grew at the slowest pace in four months at 4.5% in September 2018, as the festival season started late this year compared to 2017. Growth faltered as the output of capital goods and mining expanded at a slower pace in September than in the previous month. Some concerns also came with SBI's report stating that the sharp decline in the headline inflation print to 3.31% for October a year-year-low will result in a prolonged pause in the rates, but raises a big question mark on the Reserve Bank’s inflation forecasting.

However, market erased all early losses to enter green trajectory in the afternoon session, as investors took some support with the consumer price index (CPI) inflation easing to 3.31 percent in the month of October 2018 as compared to 3.58 percent in October 2017 on low food prices. The retail inflation number is the lowest since September 2017 when it touched 3.28 percent. Besides, a report also stated that India is pushing for liberalising norms to promote services trade with 15 other countries including China as part of a mega free trade agreement as it looks for a balanced pact with these nations.

Traders were seen piling up positions in Pvt Bank, Fin Service and Bank stocks, while selling was witnessed in Pharma, Realty and Media. The top gainers from the F&O segment were NCC, Godrej Industries and Kaveri Seed Company. On the other hand, the top losers were Allahabad Bank, Wockhardt and Bank of India. In the index option segment, maximum OI continues to be seen in the 10,700-11,100 calls and 9900 -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 3.47% and reached 18.69. The 50-share Nifty was up by 100.30 points or 0.96% to settle at 10,582.50.

Nifty November 2018 futures closed at 10615.95 on Tuesday, at a premium of 33.45 points over spot closing of 10582.50, while Nifty December 2018 futures ended at 10662.10, at a premium of 79.60 points over spot closing. Nifty November futures saw a contraction of 0.20 million (mn) units, taking the total outstanding open interest (OI) to 24.05 mn units. The near month derivatives contract will expire on November 29, 2018.

From the most active contracts, Reliance Industries November 2018 futures traded at a premium of 5.50 points at 1103.35 compared with spot closing of 1097.85. The numbers of contracts traded were 34,002.

ICICI Bank November 2018 futures traded at a discount of 0.30 points at 361.10 compared with spot closing of 361.40. The numbers of contracts traded were 22,694.

Tata Motors November 2018 futures traded at a premium of 0.95 points at 180.20 compared with spot closing of 179.25. The numbers of contracts traded were 20,247.

Bajaj Finance November 2018 futures traded at a premium of 9.30 points at 2294.30 compared with spot closing of 2285.00. The numbers of contracts traded were 20,118.

HDFC Bank November 2018 futures traded at a premium of 7.25 points at 1936.80 compared with spot closing of 1929.55. The numbers of contracts traded were 19,693.

Among Nifty calls, 10600 SP from the November month expiry was the most active call with a contraction of 0.06 million open interests. Among Nifty puts, 10,000 SP from the November month expiry was the most active put with a contraction of 0.17 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (3.24mn) and that for Puts was at 10,000 SP (4.64mn). The respective Support and Resistance levels of Nifty are: Resistance 10,638.98 ---- Pivot Point 10,539.77 --- Support --- 10,483.28.

The Nifty Put Call Ratio (PCR) finally stood at 1.51 for November month contract. The top five scrips with highest PCR on OI were Adani Power (2.01), UPL (1.44), Oil (1.37), IDBI (1.24) and Asian Paint (1.22).

Among most active underlying, Reliance Industries witnessed a contraction of 1.36 million units of Open Interest in the November month futures contract, followed by ICICI Bank witnessing an addition of 5.91 million units of Open Interest in the November month contract, State Bank of India witnessed an addition of 3.27 million units of Open Interest in the November month contract, Sun Pharmaceutical Industries witnessed an addition of 2.54 million units of Open Interest in the November month contract and Tata Steel witnessed an addition of 1.26 million units of Open Interest in the November month future contract.