Nifty snaps 3-day losing streak; reclaims 10,600 mark

Key benchmark -- Nifty -- settled Monday's trading session on an optimistic note reclaiming its 10,600 mark, after a string of declines last week. Nifty made a positive start as traders took encouragement with the Organization for Economic Cooperation and Development’s (OECD) statement that India’s economy will grow close to 7.5% in 2019 and 2020. India’s gross domestic product (GDP) grew 6.7% in 2017-18. But, market soon entered into red terrain and traded on a volatile note with National Green Tribunal chairman Justice Adarsh Kumar Goel stating that India has earned its pride of place in the world with its economy growing ‘very fast’ but a large number of people still live below the poverty line. The country had no doubt achieved growth but it was not ‘enough’ to meet the aspirations of the freedom fighters who had drafted the Constitution.

However, index made a sharp rally in the last couple of hours of trade as investors' sentiments were encouraged with a report stating that foreign investors have pumped in Rs 6,310 crore into Indian capital markets this month so far, after pulling out massive funds in October, on easing crude oil prices and a strengthening rupee. Adding to some more optimism, SBI Research reported that following decline in oil prices, the country’s current account deficit (CAD) is expected to touch 2.6% of GDP in the current fiscal against an earlier expectation of 2.8%. Investors took note of a report that the government has increased the outlay by Rs 100 crore to Rs 895 crore for the first phase of the FAME India scheme to promote mass adoption of electric vehicles, having extended the scheme four times.

All the sectoral indices ended in green on the NSE except Metal and Pharma. The top gainers from the F&O segment were Hero MotoCorp, Adani Power and Colgate Palmolive (India). On the other hand, the top losers were Jindal Steel & Power, Dewan Housing Finance Corporation and Shriram Transport Finance Company. In the index option segment, maximum OI continues to be seen in the 10,600-10,800 calls and 10,400 -10,600 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 6.48% and reached 20.40. The 50-share Nifty was up by 101.85 points 0.97% to settle at 10,628.60.

Nifty November 2018 futures closed at 10639.20 on Monday, at a premium of 10.60 points over spot closing of 10628.60, while Nifty December 2018 futures ended at 10678.00, at a premium of 49.40 points over spot closing. Nifty November futures saw a contraction of 0.64 million (mn) units, taking the total outstanding open interest (OI) to 22.24 mn units. The near month derivatives contract will expire on November 29, 2018.

From the most active contracts, Yes Bank November 2018 futures traded at a discount of 2.95 points at 188.75 compared with spot closing of 191.70. The numbers of contracts traded were 50,613.

Reliance Industries November 2018 futures traded at a premium of 1.75 points at 1111.50 compared with spot closing of 1109.75. The numbers of contracts traded were 33,266.

HDFC Bank November 2018 futures traded at a discount of 2.65 points at 2047.35 compared with spot closing of 2050.00. The numbers of contracts traded were 25,727.

Tata Steel November 2018 futures traded at a premium of 0.80 points at 531.45 compared with spot closing of 530.65. The numbers of contracts traded were 24,551.

Tata Consultancy Services November 2018 futures traded at a premium of 2.60 points at 1848.60 compared with spot closing of 1846.00. The numbers of contracts traded were 23,129.

Among Nifty calls, 10600 SP from the November month expiry was the most active call with a contraction of 0.79 million open interests. Among Nifty puts, 10,500 SP from the November month expiry was the most active put with an addition of 1.26 million open interests. The maximum OI outstanding for Calls was at 10,700 SP (3.25mn) and that for Puts was at 10,500 SP (4.23mn). The respective Support and Resistance levels of Nifty are: Resistance 10,681.02 ---- Pivot Point 10,585.38 --- Support --- 10,532.97.

The Nifty Put Call Ratio (PCR) finally stood at 1.56 for November month contract. The top five scrips with highest PCR on OI were Adani Power (2.19), IDBI (1.90), Adani Ports and Special Economic Zone (1.59), Hero Motocorp (1.43) and UPL (1.42).

Among most active underlying, Reliance Industries witnessed a contraction of 5.00 million units of Open Interest in the November month futures contract, followed by Yes Bank witnessing a contraction of 20.39 million units of Open Interest in the November month contract, Maruti Suzuki India witnessed a contraction of 0.25 million units of Open Interest in the November month contract, State Bank of India witnessed a contraction of 5.56 million units of Open Interest in the November month contract and ICICI Bank witnessed a contraction of 3.53 million units of Open Interest in the November month future contract.