Nifty finishes near intraday high; surges over 1.75%

Key equity indices -- Nifty -- posted highest 1-day gains in 5 weeks on Wednesday’s trading session, as traders reacted positively on appointment of former bureaucrat Shaktikanta Das as the new RBI Governor. Index made a gap-up opening, as market participants took note of CII’s statement that the appointment of former bureaucrat Shaktikanta Das as the new Reserve Bank of India (RBI) Governor comes as a huge sentiment booster to the industry and expressed confidence that he will take urgent steps to address the liquidity squeeze in economy. Moreover, CII said that the government should consider permitting 100% foreign direct investment (FDI) in multi-brand retail trade and further improve ease of doing business for the sector to promote growth in the segment.

Frontline equity indices enticed more traction in the afternoon deals as market participants took encouragement with Asian Development Bank (ADB) retaining Indian growth forecast at 7.3 percent for the current fiscal and 7.6 percent for the next financial year 2019-20, amid rebounding exports and higher industrial & agricultural output. Besides, a report also stated that markets regulator SEBI will discuss a slew of measures at its board meeting on December 12 for expanding its offer for sale framework to more companies, relax its norms for clubbing of investment limits by established foreign investors and tighten insider trading rules.

All the sectoral indices ended in green on the NSE. The top gainers from the F&O segment were Infibeam Avenues, Can Fin Homes and Syndicate Bank. On the other hand, the top losers were Dr. Reddy's Laboratories, Power Finance Corporation and Max Financial Services. In the index option segment, maximum OI continues to be seen in the 10,900-11,200 calls and 9900 -10,100 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 11.90% and reached 15.81. The 50-share Nifty was up by 188.45 points 1.79% to settle at 10,737.60.

Nifty December 2018 futures closed at 10783.65 on Wednesday, at a premium of 46.05 points over spot closing of 10737.60, while Nifty January 2019 futures ended at 10831.90, at a premium of 94.30 points over spot closing. Nifty December futures saw an addition of 0.29 million (mn) units, taking the total outstanding open interest (OI) to 21.52 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 0.70 points at 187.20 compared with spot closing of 186.50. The numbers of contracts traded were 42,200.

Reliance Industries December 2018 futures traded at a premium of 5.40 points at 1116.30 compared with spot closing of 1110.90. The numbers of contracts traded were 35,239.

Indiabulls Housing Finance December 2018 futures traded at a discount of 3.50 points at 737.30 compared with spot closing of 740.80. The numbers of contracts traded were 24,412.

Sun Pharmaceutical Industries December 2018 futures traded at a premium of 1.45 points at 432.25 compared with spot closing of 430.80. The numbers of contracts traded were 23,747.

ICICI Bank December 2018 futures traded at a premium of 2.20 points at 351.35 compared with spot closing of 349.15. The numbers of contracts traded were 20,247.

Among Nifty calls, 10800 SP from the December month expiry was the most active call with an addition of 0.24 million open interests. Among Nifty puts, 10,500 SP from the December month expiry was the most active put with an addition of 0.45 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.35mn) and that for Puts was at 10,000 SP (5.31mn). The respective Support and Resistance levels of Nifty are: Resistance 10,806.27 ---- Pivot Point 10,683.53 --- Support --- 10,614.87.

The Nifty Put Call Ratio (PCR) finally stood at 1.22 for December month contract. The top five scrips with highest PCR on OI were Mangalore Refinery & Petrochemicals (1.84), V-Guard Industries (1.80), IDBI Bank (1.63), Hero Motocorp (1.47) and Adani Power (1.40).

Among most active underlying, Reliance Industries witnessed an addition of 1.71 million units of Open Interest in the December month futures contract, followed by ICICI Bank witnessing an addition of 4.87 million units of Open Interest in the December month contract, Kotak Mahindra Bank witnessed a contraction of 0.47 million units of Open Interest in the December month contract, State Bank of India witnessed a contraction of 0.80 million units of Open Interest in the December month contract and Yes Bank witnessed a contraction of 0.75 million units of Open Interest in the December month future contract.