Nifty ends lower on weak global cues; crashes over 1%

Mirroring weak global markets, key equity benchmark -- Nifty -- finished second trading day of 2019 in red terrain. Nifty crashed over 100 points amid selloff in Metal, Realty and Auto stocks. Barometer made a cautions start as market participants remained concerned with the government once again missing the target of garnering more than one lakh crore rupees from Goods and Services Tax (GST) in the month of December, giving rise to concerns that the government may not be able to contain the fiscal deficit to 3.2% of the GDP. Disappointment remained on the streets with a private report stating that the Reserve Bank of India's (RBI) estimates of the gross non-performing asset (GNPA) ratio, in severe stress scenarios, for the quarter ahead have been inaccurate five out of six times in its financial stability reports (FSR) since FY16.

Barometer extended the losses in the second half of the trade, as investors continued reacting negatively on report that Indian manufacturing sector slowed down in the month of December. Growth was curtailed by competitive pressures, labour issues and challenging public policies. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - eased to 53.2 in December from 54 in November. Traders ignored a report that India remained ahead of China to retain the tag world’s fastest growing large economy withstanding several ups and downs, spike in oil prices and global trade war like situation during 2018.

All the sectoral indices ended in red on the NSE. The top gainers from the F&O segment were Bharat Electronics, The Federal Bank and BEML. On the other hand, the top losers were Eicher Motors, Jet Airways (India) and JSW Steel. 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 6.93% and reached 16.39. The 50-share Nifty was down by 117.60 points 1.08% to settle at 10,792.50.

Nifty January 2019 futures closed at 10830.85 on Wednesday, at a premium of 38.35 points over spot closing of 10792.50, while Nifty February 2019 futures ended at 10862.85, at a premium of 70.35 points over spot closing. Nifty January futures saw a contraction of 23.35 million (mn) units, taking the total outstanding open interest (OI) to 0.05 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 6.70 points at 1111.05 compared with spot closing of 1104.35. The numbers of contracts traded were 27,547.

Yes Bank January 2019 futures traded at a premium of 1.15 points at 185.75 compared with spot closing of 184.60. The numbers of contracts traded were 24,089.

Tata Steel January 2019 futures traded at a premium of 3.50 points at 496.00 compared with spot closing of 492.50. The numbers of contracts traded were 22,238.

Eicher Motors January 2019 futures traded at a premium of 257.45 points at 21271.45 compared with spot closing of 21014.00. The numbers of contracts traded were 21,815.

SBI January 2019 futures traded at a premium of 1.65 points at 295.45 compared with spot closing of 293.80. The numbers of contracts traded were 19,310.

Among Nifty calls, 11,000 SP from the January month expiry was the most active call with an addition of 0.47 million open interests. Among Nifty puts, 10,500 SP from the January month expiry was the most active put with an addition of 0.49 million open interests. The maximum OI outstanding for Calls was at 11,200 SP (3.21mn) and that for Puts was at 10,500 SP (4.10mn). The respective Support and Resistance levels of Nifty are: Resistance 10,880.22 ---- Pivot Point 10,807.63 --- Support --- 10,719.92

The Nifty Put Call Ratio (PCR) finally stood at 1.21 for January month contract. The top five scrips with highest PCR on OI were Ramco Cements (1.75), SREI Infrastructure Finance (1.60), Tata Motors-DVR (1.18), Godfrey Phillips India (1.13) and Bharat Forge (1.09).

Among most active underlying, Reliance Industries witnessed a contraction of 0.37 million units of Open Interest in the January month futures contract, followed by SBI witnessing an addition of 0.11 million units of Open Interest in the January month contract, ICICI Bank witnessed an addition of 0.67 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 Tata Steel witnessed an addition of 3.05 million units of Open Interest in the January month future contract.