Nifty finishes with small gain; holds 10,850-level mark

Local equity benchmark -- Nifty -- finishes last session of calendar year 2018 with a small gain after witnessing a volatile session, with Nifty closing just 2 points higher, holding 10,850-level mark. The market made a gap-up start, as traders remained optimistic with the Confederation of Indian Industry’s (CII) statement that the country is expected to witness strong economic growth in 2019, after it has emerged as the fastest growing major world economy this year despite growing global vulnerabilities. Some support also came with the government’s statement that the net direct tax collection till December 20 this fiscal amounted to Rs 7.36 lakh crore, a growth of 14% over the same period a year ago. This is 64% of the Budget estimate for direct tax collection in the current fiscal. Also, markets received some support from strengthening of rupee against the dollar.

However, market pared gains but managed to trade in green trajectory in the second half of the trading session, as traders remained cautions with a report that inflation seems to have become a double-edged sword for policy makers with political opponents attacking the government over farmers getting hit due to low prices for agricultural produce, even as the rate of price rise in 2018 has mostly been contained within the targeted comfort zone. Some pessimism also came with a private report stating that restrictions on foreign e-commerce companies would have a long-term negative impact on the foreign direct investment as well as consumers in India. However, more losses were restricted, as traders took some solace with a private report said that India has pipped its neighbour in 2018 for the first time in the last 20 years in terms of attracting foreign direct investment (FDI). With 253 inbound deals amounting to $39.515 billion, India’s annual FDI was higher than that of China’s so far this calendar year.

All the sectoral indices ended in green on the NSE except FMCG and Realty. The top gainers from the F&O segment were Dewan Housing Finance Corporation, Steel Authority of India and Gujarat State Fertilizers & Chemicals. On the other hand, the top losers were PC Jeweller, Reliance Communications and V-Guard Industries. 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 increased by 4.78% and reached 16.00. The 50-share Nifty was up by 2.65 points 0.02% to settle at 10,862.55.

Nifty January 2019 futures closed at 10916.85 on Monday, at a premium of 54.30 points over spot closing of 10862.55, while Nifty February 2019 futures ended at 10948.80, at a premium of 86.25 points over spot closing. Nifty January futures saw a contraction of 0.92 million (mn) units, taking the total outstanding open interest (OI) to 23.40 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 3.30 points at 1128.55 compared with spot closing of 1125.25. The numbers of contracts traded were 18,891.

Tata Steel January 2019 futures traded at a premium of 3.45 points at 524.45 compared with spot closing of 521.00. The numbers of contracts traded were 13,073.

Dewan Housing Finance Corporation January 2019 futures traded at a premium of 0.65 points at 249.15 compared with spot closing of 248.50. The numbers of contracts traded were 11,488.

Yes Bank January 2019 futures traded at a premium of 0.95 points at 182.85 compared with spot closing of 181.90. The numbers of contracts traded were 10,868.

Indiabulls Housing Finance January 2019 futures traded at a discount of 3.35 points at 849.65 compared with spot closing of 853.00. The numbers of contracts traded were 10,304.

Among Nifty calls, 11,000 SP from the January month expiry was the most active call with an addition of 0.18 million open interests. Among Nifty puts, 10,800 SP from the January month expiry was the most active put with an addition of 0.19 million open interests. The maximum OI outstanding for Calls was at 11,200 SP (2.82mn) and that for Puts was at 10,500 SP (3.32mn). The respective Support and Resistance levels of Nifty are: Resistance 10,906.33 ---- Pivot Point 10,879.77 --- Support --- 10,835.98.

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 (2.22), Ramco Cements (1.53), Tata Motors-DVR (1.39), NMDC (1.22) and TCS (1.21).

Among most active underlying, Reliance Industries witnessed an addition of 0.74 million units of Open Interest in the January month futures contract, followed by Kotak Mahindra Bank witnessing an addition of 0.21 million units of Open Interest in the January month contract, Tata Steel witnessed an addition of 0.53 million units of Open Interest in the January month contract, Maruti Suzuki India witnessed an addition of 0.09 million units of Open Interest in the January month contract and ICICI Bank witnessed an addition of 0.08 million units of Open Interest in the January month future contract.