Nifty extend southern journey for second straight day

Key equity benchmark -- Nifty -- slumped over 1% amid sell-off in global markets. Traders’ sentiments turned cautious ahead of corporate earnings beginning next week. Nifty made a negative start and soon entered into green trajectory as market participants turned optimistic after the Finance Ministry in its 2018 review stated that the Indian economy is projected to be the fastest-growing major economy in the current and upcoming fiscal 2019-20. It also emphasized that the government has taken several steps to boost investors’ confidence. Some optimism came with Finance Ministry’s another statement that the direct tax-to-GDP ratio of 5.98% achieved during 2017-18 fiscal is the best in the last 10 years. It was 5.57% in 2016-17 and 5.47% in 2015-16. Besides, the government’s decision to provide 3% interest subsidy to merchant exporters, entailing an expenditure of Rs 600 crore, to enhance liquidity with a view to boosting outbound shipments.

Barometer failed to hold gains and entered into red terrain in second half of the trade, as investor sentiments remained downbeat with a private report stating that global economic growth is expected to slow down in 2019, as tighter monetary policy, weaker earnings growth and political challenges confront the world's major economies. Markets extended southward journey to end near intraday lows as traders ignored Finance Minister Arun Jaitley’s statement that Rs 80,000 crore has been recovered by creditors in 66 cases resolved by NCLT and around Rs 70,000 crore more is likely to be realised by March-end.

All the sectoral indices ended in red on the NSE. The top gainers from the F&O segment were Ujjivan Financial Services, Bharti Infratel and Tata Communications. On the other hand, the top losers were Jindal Steel & Power, Jet Airways (India) and Reliance Infrastructure. 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 2.46% and reached 16.79. The 50-share Nifty was down by 120.25 points 1.11% to settle at 10,672.25.

Nifty January 2019 futures closed at 10718.50 on Thursday, at a premium of 46.25 points over spot closing of 10672.25, while Nifty February 2019 futures ended at 10750.90, at a premium of 78.65 points over spot closing. Nifty January futures saw an addition of 1.06 million (mn) units, taking the total outstanding open interest (OI) to 25.22 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 8.25 points at 1098.55 compared with spot closing of 1090.30. The numbers of contracts traded were 26,146.

Tata Steel January 2019 futures traded at a premium of 2.00 points at 482.90 compared with spot closing of 480.90. The numbers of contracts traded were 22,466.

Eicher Motors January 2019 futures traded at a premium of 78.35 points at 20347.35 compared with spot closing of 20269.00. The numbers of contracts traded were 17,815.

HDFC Bank January 2019 futures traded at a premium of 0.05 points at 2123.70 compared with spot closing of 2123.65. The numbers of contracts traded were 16,618.

ICICI Bank January 2019 futures traded at a premium of 1.75 points at 363.85 compared with spot closing of 362.10. The numbers of contracts traded were 15,052.

Among Nifty calls, 11,000 SP from the January month expiry was the most active call with an addition of 0.83 million open interests. Among Nifty puts, 10,500 SP from the January month expiry was the most active put with a contraction of 0.11 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (3.91mn) and that for Puts was at 10,500 SP (3.97mn). The respective Support and Resistance levels of Nifty are: Resistance 10,770.45 ---- Pivot Point 10,715.85 --- Support --- 10,617.65.

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 (1.43), Godfrey Phillips India (1.16), NMDC (1.15) and Page Industries (1.14).

Among most active underlying, Reliance Industries witnessed an addition of 0.82 million units of Open Interest in the January month futures contract, followed by ICICI Bank witnessing an addition of 0.84 million units of Open Interest in the January month contract, Tata Steel witnessed an addition of 2.41 million units of Open Interest in the January month contract, SBI witnessed an addition of 1.49 million units of Open Interest in the January month contract and Eicher Motors witnessed an addition of 0.06 million units of Open Interest in the January month future contract.