Nifty end higher for second straight day; reclaims 10,750-mark

Key equity benchmark -- Nifty -- ended higher for the second straight session on Thursday, on account of a record rally in US stocks overnight and weak global crude oil prices. Barometer made a gap-up start, as traders got support with a private report stating that with global crude oil prices slumping to below $50 a barrel just months after crossing $86, the Prime Minister Narendra Modi-led government is now confident that the current account deficit (CAD) for FY19 can be contained at about 2 per cent of gross domestic product (GDP). Sentiment also remained encouraged with Reserve Bank of India’s study showing that private sector non-finance firms reported a 41 per cent growth in net profits during the July-September quarter, despite higher expenditure as other income contributed to growth. The central bank attributed this to the strong growth in manufacturing sector profits, which received support from other income.

Market continued to hold positive momentum in the afternoon deals, as traders remained optimistic with Union Minister Suresh Prabhu’s statement that India will aim to receive $100 billion in foreign direct investments in the next two years and special industrial clusters are being created for countries like Japan, South Korea, China and Russia where their companies can invest and operate. Traders remained energized with a report which stated that the government is likely to infuse Rs 28,615 crore into seven public sector banks (PSBs) through recapitalisation bonds by the end of this month.

All the sectoral indices ended in red on the NSE except FMCG, IT and Media. The top gainers from the F&O segment were Jaiprakash Associates, Cummins India and PC Jeweller. On the other hand, the top losers were NMDC, Max Financial Services and Repco Home Finance. In the index option segment, maximum OI continues to be seen in the 10,800-11,200 calls and 10,300 -10,700 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 0.96% and reached 16.07. The 50-share Nifty was up by 49.95 points 0.47% to settle at 10,779.80.

Nifty January 2019 futures closed at 10809.85 on Thursday, at a premium of 30.05 points over spot closing of 10779.80, while Nifty February 2019 futures ended at 10842.15, at a premium of 62.35 points over spot closing. Nifty January futures saw an addition of 4.46 million (mn) units, taking the total outstanding open interest (OI) to 21.82 mn units. The near month derivatives contract will expire on January 31, 2019.

From the most active contracts, Yes Bank January 2019 futures traded at a premium of 0.50 points at 179.20 compared with spot closing of 178.70. The numbers of contracts traded were 40,192.

Reliance Industries January 2019 futures traded at a premium of 5.70 points at 1123.80 compared with spot closing of 1118.10. The numbers of contracts traded were 32,586.

Sun Pharmaceutical Industries January 2019 futures traded at a premium of 2.05 points at 413.85 compared with spot closing of 411.80. The numbers of contracts traded were 26,263.

HDFC Bank January 2019 futures traded at a premium of 10.95 points at 2117.95 compared with spot closing of 2107.00. The numbers of contracts traded were 23,055.

Among Nifty calls, 10,800 SP from the January month expiry was the most active call with an addition of 0.67 million open interests. Among Nifty puts, 10,800 SP from the January 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 (2.32mn) and that for Puts was at 10,500 SP (2.91mn). The respective Support and Resistance levels of Nifty are: Resistance 10,821.18 ---- Pivot Point 10,792.82 --- Support --- 10,751.43

The Nifty Put Call Ratio (PCR) finally stood at 1.26 for January month contract. The top five scrips with highest PCR on OI were SREI Infrastructure Finance (3.25), Tata Motors-DVR (1.92), Bajaj Auto (1.85), Gujarat State Fertilizers and Chemicals (1.83) and Balkrishna Industries (1.74).

Among most active underlying, Reliance Industries witnessed an addition of 4.85 million units of Open Interest in the January month futures contract, followed by State Bank of India witnessing an addition of 11.08 million units of Open Interest in the January month contract, Maruti Suzuki India witnessed an addition of 0.42 million units of Open Interest in the January month contract, Infosys witnessed an addition of 3.83 million units of Open Interest in the January month contract and ICICI Bank witnessed a contraction of 10.08 million units of Open Interest in the January month future contract.