Nifty starts new series on optimistic note; reclaim 10,850-mark

Extending gains for third straight session, key equity benchmark -- Nifty -- ended higher on last day for the trading week, on across-the-board buying by foreign funds amid a rebound in the rupee. Market made a positive start and gained momentum as investors took encouragement with report that under attack for the agrarian crisis, the government is contemplating several incentives, including a big financial package, to woo farmers ahead of the 2019 Lok Sabha elections. Sentiments also remained upbeat with a report that the new foreign direct investment (FDI) policy in the e-commerce sector may not impact jobs immediately. The new FDI policy released by the government on December 26 aims to protect the interests of local businessmen, who had accused the online marketplaces of butchering their revenue.

Market continued to trade in the positive trajectory in the afternoon session, as trader got support with Ministry of Commerce & Industry’s report which showed that the growth of manufacturing sector as measured by the Index of Industrial Production (IIP) with base year 2011-12, has been consistently increasing over the past three years and the current year. However, market trimmed some gains in the last leg of the trade, with a private report stating that the fiscal situation of the Narendra Modi government has worsened with the fiscal deficit in the first eight months of the financial year 2018-19 hitting 115% of the budget estimates.

All the sectoral indices ended in green on the NSE. The top gainers from the F&O segment were Reliance Capital, Steel Authority of India and REC. On the other hand, the top losers were V-Guard Industries, Bharti Infratel and Just Dial. In the index option segment, maximum OI continues to be seen in the 11,000-11,400 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 decreased by 4.99% and reached 15.27. The 50-share Nifty was up by 80.10 points 0.74% to settle at 10,859.90.

Nifty January 2019 futures closed at 10907.75 on Friday, at a premium of 47.85 points over spot closing of 10859.90, while Nifty February 2019 futures ended at 10941.15, at a premium of 81.25 points over spot closing. Nifty January futures saw an addition of 0.65 million (mn) units, taking the total outstanding open interest (OI) to 22.48 mn units. The near month derivatives contract will expire on January 31, 2019.

From the most active contracts, Reliance Industries January 2019 futures traded at a premium of 7.20 points at 1132.85 compared with spot closing of 1125.65. The numbers of contracts traded were 24,074.

Sun Pharmaceutical Industries January 2019 futures traded at a premium of 1.95 points at 426.95 compared with spot closing of 425.00. The numbers of contracts traded were 19,185.

Yes Bank January 2019 futures traded at a premium of 1.05 points at 182.70 compared with spot closing of 181.65. The numbers of contracts traded were 15,787.

HDFC Bank January 2019 futures traded at a premium of 10.20 points at 2134.20 compared with spot closing of 2124.00. The numbers of contracts traded were 14,775.

Bajaj Finance January 2019 futures traded at a premium of 5.10 points at 2646.10 compared with spot closing of 2641.00. The numbers of contracts traded were 13,794.

Among Nifty calls, 11,000 SP from the January month expiry was the most active call with an addition of 0.14 million open interests. Among Nifty puts, 10,800 SP from the January month expiry was the most active put with an addition of 0.44 million open interests. The maximum OI outstanding for Calls was at 11,200 SP (2.64mn) and that for Puts was at 10,500 SP (3.23mn). The respective Support and Resistance levels of Nifty are: Resistance 10,896.62 ---- Pivot Point 10,856.88 --- Support --- 10,820.17

The Nifty Put Call Ratio (PCR) finally stood at 1.27 for January month contract. The top five scrips with highest PCR on OI were SREI Infrastructure Finance (2.55), Ramco Cements (1.63), Tata Motors-DVR (1.48), NMDC (1.39) and India Cements (1.33).

Among most active underlying, Reliance Industries witnessed an addition of 0.44 million units of Open Interest in the January month futures contract, followed by ICICI Bank witnessing an addition of 3.12 million units of Open Interest in the January month contract, Sun Pharmaceutical Industries witnessed a contraction of 0.14 million units of Open Interest in the January month contract, State Bank of India witnessed an addition of 0.91 million units of Open Interest in the January month contract and Titan Company witnessed an addition of 0.01 million units of Open Interest in the January month future contract.