Nifty surges for seventh straight session

Continuing winning streak for the seventh consecutive session, key equity benchmark -- Nifty – ended higher on Wednesday, driven by gains in Realty, FMCG and Auto stocks. Strengthening rupee and falling global crude prices too aided sentiments. Index made a gap-up start, taking encouragement with the Reserve Bank of India’s (RBI) statement that it has decided to scale up the amount of liquidity infusion by Rs 10,000 crore to Rs 50,000 crore this month after a review of the evolving liquidity conditions. The RBI also announced to conduct the purchase of government securities under Open Market Operations (OMOs) for Rs 150 billion on December 20. Adding to the optimism, chairman designate of Central Board of Indirect Taxes and Customs P K Das stated that the next three months would see the Centre put in place changes in policy and procedures to ensure India further improves its position in the Ease of Doing Business Report-2019.

Market continued its gaining momentum to end in green terrain, as traders got support with Finance Minister Arun Jaitley releasing the NITI Aayog's strategy for New India, a paper envisaging goals for the country in the 75th year of its Independence in 2022. According to the NITI Aayog strategy paper, the government aims to increase India's tax-to-GDP ratio to 22 per cent and accelerate economic growth rate to 8 per cent. Sentiments also remained encouraged with a private report stating that the overall consumer confidence has slipped in the month of December, with liquidity crunch, high inflation and rising interest rates leading to pessimism.

All the sectoral indices ended in green on the NSE except IT and Pharma stocks. The top gainers from the F&O segment were NBCC, DLF and Indiabulls Housing Finance. On the other hand, the top losers were Reliance Communications, HCL Technologies and Chennai Petroleum Corporation. 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 increased by 0.57% and reached 14.67. The 50-share Nifty was up by 58.60 points 0.54% to settle at 10,967.30. 

Nifty December 2018 futures closed at 10986.50 on Wednesday, at a premium of 19.20 points over spot closing of 10967.30, while Nifty January 2019 futures ended at 11032.20, at a premium of 64.90 points over spot closing. Nifty December futures saw an addition of 0.12 million (mn) units, taking the total outstanding open interest (OI) to 21.24 mn units. The near month derivatives contract will expire on December 27, 2018.

From the most active contracts, Indiabulls Housing Finance December 2018 futures traded at a premium of 4.60 points at 842.15 compared with spot closing of 837.55. The numbers of contracts traded were 32,139.

Reliance Industries December 2018 futures traded at a premium of 3.90 points at 1138.75 compared with spot closing of 1134.85. The numbers of contracts traded were 25,278.

Bajaj Finance December 2018 futures traded at a premium of 8.80 points at 2600.80 compared with spot closing of 2592.00. The numbers of contracts traded were 24,264.

Axis Bank December 2018 futures traded at a premium of 1.65 points at 641.65 compared with spot closing of 640.00. The numbers of contracts traded were 23,579.

Yes Bank December 2018 futures traded at a premium of 1.10 points at 180.25 compared with spot closing of 179.15. The numbers of contracts traded were 22,952.  

Among Nifty calls, 11000 SP from the December month expiry was the most active call with a contraction of 0.59 million open interests. Among Nifty puts, 10,900 SP from the December month expiry was the most active put with an addition of 0.56 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (3.83mn) and that for Puts was at 10,000 SP (4.73mn). The respective Support and Resistance levels of Nifty are: Resistance 10,992.30 ---- Pivot Point 10,960.15 --- Support --- 10,935.15

The Nifty Put Call Ratio (PCR) finally stood at 1.46 for December month contract. The top five scrips with highest PCR on OI were Power Grid Corporation of India (2.00), Adani Power (1.50), Indigo (1.40), Godrej Consumer Products (1.38) and Dabur (1.35).

Among most active underlying, State Bank of India witnessed a contraction of 2.49 million units of Open Interest in the December month futures contract, followed by Reliance Industries witnessing a contraction of 0.90 million units of Open Interest in the December month contract, Axis Bank Limited witnessed a contraction of 0.98 million units of Open Interest in the December month contract, ICICI Bank witnessed a contraction of 3.05 million units of Open Interest in the December month contract and Maruti Suzuki witnessed a contraction of 0.02 million units of Open Interest in the December month future contract.