Nifty finishes volatile session on optimistic note

Key equity benchmark -- Nifty -- ended volatile session on an optimistic note, with barometer -- Nifty 50 -- reclaiming the 10,700-mark led by robust buying in Metal and Financial Services amid positive global cues and a strengthening rupee. Barometer made a gap up start and soon entered into red trajectory, as investors turned pessimistic with a private report that despite crossing Rs 1 trillion mark twice this year, the goods and services tax (GST) collections are running well behind the budgeted target. As opposed to a monthly target of Rs 1.04 trillion, the monthly run rate adjusting for refunds, works out to around Rs 89,600 crore. However, market soon recovered from the losses and enter into green terrain with a strong momentum as trader were getting encouragement with Finance Minister Arun Jaitley’s statement that enacting the Insolvency and Bankruptcy Code (IBC) has helped lenders get Rs 80,000 crore in 66 cases and another about Rs 70,000 crore is likely to be recovered in the remaining months of the current financial year.

Market participants got support with a report that Central Board of Indirect Taxes and Customs (CBIC) has allowed businesses to correct any error or omission in filing of final sales return or GSTR-1 for the period July 2017-March 2018. Now businesses can correct the errors in the returns to be filed for January-March 2019. Investors ignored weak services PMI data. India’s services sector activity fell in month of December, as growth of new work and activity moderated from November’s recent high. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index slipped to 53.2 in December from 53.7 in November.

All the sectoral indices ended in green on the NSE except IT. The top gainers from the F&O segment were Bharti Infratel, Syndicate Bank and Punjab National Bank. On the other hand, the top losers were Page Industries, Petronet LNG and Nestle India. 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 decreased by 3.74% and reached 16.16. The 50-share Nifty was up by 55.10 points 0.52% to settle at 10,727.35.

Nifty January 2019 futures closed at 10777.60 on Friday, at a premium of 50.25 points over spot closing of 10727.35, while Nifty February 2019 futures ended at 10811.35, at a premium of 84.00 points over spot closing.  Nifty January futures saw an addition of 0.07 million (mn) units, taking the total outstanding open interest (OI) to 25.29 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 0.95 points at 190.95 compared with spot closing of 190.00. The numbers of contracts traded were 34,962.

Reliance Industries January 2019 futures traded at a premium of 6.05 points at 1105.65 compared with spot closing of 1099.60. The numbers of contracts traded were 29,450.

TCS January 2019 futures traded at a discount of 3.70 points at 1878.30 compared with spot closing of 1882.00. The numbers of contracts traded were 25,493.

ICICI Bank January 2019 futures traded at a premium of 0.85 points at 367.20 compared with spot closing of 366.35. The numbers of contracts traded were 21,858.

Tata Steel January 2019 futures traded at a premium of 4.38 points at 491.80 compared with spot closing of 487.42. The numbers of contracts traded were 21,028.

Among Nifty calls, 11,000 SP from the January month expiry was the most active call with a contraction of 0.02 million open interests. Among Nifty puts, 10,500 SP from the January month expiry was the most active put with an addition of 0.09 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (3.90mn) and that for Puts was at 10,500 SP (4.05mn). The respective Support and Resistance levels of Nifty are: Resistance 10,769.38 ---- Pivot Point 10,699.02 --- Support --- 10,656.98.

The Nifty Put Call Ratio (PCR) finally stood at 1.09 for January month contract. The top five scrips with highest PCR on OI were SREI Infrastructure Finance (1.58), Page Industries (1.27), Godfrey Phillips India (1.10), NMDC (1.03) and TCS (1.00).

Among most active underlying, ICICI Bank witnessed an addition of 3.70 million units of Open Interest in the January month futures contract, followed by Reliance Industries witnessing an addition of 0.90 million units of Open Interest in the January month contract, SBI witnessed an addition of 2.92 million units of Open Interest in the January month contract, TCS witnessed an addition of 0.38 million units of Open Interest in the January month contract and Maruti Suzuki India witnessed a contraction of 0.004 million units of Open Interest in the January month future contract.