Nifty continues upward trend for fourth consecutive day

Extending its winning streak for fourth day in a row, key equity benchmark -- Nifty -- ended higher by more than 1 percent on Thursday as comments from the US Federal Reserve chairman boosted investors’ sentiments. Index made an optimistic start with as traders got encouragement from Union Minister Suresh Prabhu’s statement that the commerce and industry ministry is preparing an action plan for implementing the proposed new industrial policy, aimed at promoting manufacturing and economic growth of the country. Traders’ sentiments remained on a positive side with Commerce and Industry Minister Suresh Prabhu’s statement that the government is taking several steps, such as reducing regulatory burden and ensuring availability of adequate funds, for budding entrepreneurs to promote startup ecosystem in the country.

Index maintained its upward trend in second half of the session, as traders were getting support from Niti Aayog Vice-Chairman Rajiv Kumar’s statement that India will have to undertake more reforms and try harder to grow at over 8%. He also pointed out that the government needs to invest more in the country’s statistical system. Besides, a private report that the Reserve Bank of India (RBI) may have to conduct open market operations (OMOs) of another Rs 1,60,000 crore in the fourth quarter of the current fiscal to tide over the banking liquidity crisis.

All the sectoral indices ended in green on the NSE except IT. The top gainers from the F&O segment were Infibeam Avenues, Adani Enterprises and Mahindra & Mahindra Financial Services. On the other hand, the top losers were Suzlon Energy, Arvind and Repco Home Finance. In the index option segment, maximum OI continues to be seen in the 10,900-11,200 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 4.11% and reached 18.69. The 50-share Nifty was up by 129.85 points 1.21% to settle at 10,858.70.

Nifty December 2018 futures closed at 10890.40 on Thursday, at a premium of 31.70 points over spot closing of 10858.70, while Nifty January 2019 futures ended at 10934.40, at a premium of 75.70 points over spot closing. Nifty December futures saw an addition of 7.05 million (mn) units, taking the total outstanding open interest (OI) to 19.31 mn units. The near month derivatives contract will expire on December 27, 2018.

From the most active contracts, Yes Bank December 2018 futures traded at a premium of 0.30 points at 161.35 compared with spot closing of 161.05. The numbers of contracts traded were 1, 01,857.

HDFC Bank December 2018 futures traded at a discount of 6.90 points at 2125.35 compared with spot closing of 2132.25. The numbers of contracts traded were 42,591.

Reliance Industries December 2018 futures traded at a premium of 5.45 points at 1173.25 compared with spot closing of 1167.80. The numbers of contracts traded were 37,352.

ICICI Bank December 2018 futures traded at a discount of 0.45 points at 361.75 compared with spot closing of 362.20. The numbers of contracts traded were 23,805.

Bajaj Finance December 2018 futures traded at a premium of 2.20 points at 2517.20 compared with spot closing of 2515.00. The numbers of contracts traded were 22,162.

Among Nifty calls, 10800 SP from the December month expiry was the most active call with an addition of 0.19 million open interests. Among Nifty puts, 10,800 SP from the December month expiry was the most active put with an addition of 0.89 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (2.37mn) and that for Puts was at 10,500 SP (3.63mn). The respective Support and Resistance levels of Nifty are: Resistance 10,900.38 ---- Pivot Point 10,841.37 --- Support --- 10,799.68.

The Nifty Put Call Ratio (PCR) finally stood at 1.29 for December month contract. The top five scrips with highest PCR on OI were SREI Infrastructure Finance (3.63), V-Guard Industries (3.00), Torrent Power (2.08), Ramco Cements (2.00) and Equitas Holdings (1.94).

Among most active underlying, Yes Bank witnessed an addition of 40.63 million units of Open Interest in the December month futures contract, followed by Reliance Industries witnessing an addition of 9.85 million units of Open Interest in the December month contract, ICICI Bank witnessed an addition of 23.06 million units of Open Interest in the December month contract, State Bank of India witnessed an addition of 24.11 million units of Open Interest in the December month contract and HDFC Bank witnessed an addition of 4.65 million units of Open Interest in the December month future contract.