Nifty add half a percent gain in range-bound trade

Tracking positive cues from global market, key equity benchmark -- Nifty -- managed to garner gains of around half a percent in a range-bound trade on Monday. Nifty made a gap up start, as traders remained energized with Federation of Indian Chambers of Commerce and Industry’s (FICCI) president Sandip Somany’s statement that agricultural reforms, interest rate cut and credit availability to micro, small and medium enterprises will drive India’s economic growth to 7.5% in 2019-20. He added that the economy is on a good footing. Some encouragement also came with Reserve Bank of India (RBI) data showing that the country’s foreign exchange reserves increased by $116.4 million to $393.404 billion in the week to December 28, on account of rise in foreign currency assets. In the previous week, the reserves had increased by $167.2 million to $393.287 billion.

Market pared some of their gains in last leg of trade, as market participants remain disappointed with RBI study which showed that a sudden surge in crude prices can upset the nation’s key macro-stability parameters, as it can sharply spike the current account deficit (CAD), inflation and the fiscal numbers, whittling the benefits of higher growth. Though, Nifty managed to close above its crucial 10,750 mark as traders continued taking support with reports that Commerce and industry minister Suresh Prabhu will meet the banking and financial services secretaries next week to resolve the huge decline in bank credit to exporters.

All the sectoral indices ended in green on the NSE except Metal, Pharma and PSU bank. The top gainers from the F&O segment were Repco Home Finance, Reliance Power and Dish TV India. On the other hand, the top losers were Indiabulls Housing Finance, V-Guard Industries and Dewan Housing Finance Corporation. 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 0.87% and reached 16.30. The 50-share Nifty was up by 44.45points 0.41% to settle at 10,771.80.

Nifty January 2019 futures closed at 10803.45 on Monday, at a premium of 31.65 points over spot closing of 10771.80, while Nifty February 2019 futures ended at 10836.85, at a premium of 65.05 points over spot closing. Nifty January futures saw a contraction of 0.26 million (mn) units, taking the total outstanding open interest (OI) to 25.03 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 0.85 points at 187.80 compared with spot closing of 186.95. The numbers of contracts traded were 26,114.

Reliance Industries January 2019 futures traded at a premium of 2.35 points at 1108.75 compared with spot closing of 1106.40. The numbers of contracts traded were 22,087.

IndusInd Bank January 2019 futures traded at a premium of 8.40 points at 1567.90 compared with spot closing of 1559.50. The numbers of contracts traded were 20,070.

Axis Bank January 2019 futures traded at a premium of 1.50 points at 638.80 compared with spot closing of 637.30. The numbers of contracts traded were 18,738.

Tata Motors January 2019 futures traded at a premium of 1.20 points at 176.25 compared with spot closing of 175.05. The numbers of contracts traded were 17,127.

Among Nifty calls, 11,000 SP from the January month expiry was the most active call with an addition of 0.11 million open interests. Among Nifty puts, 10,700 SP from the January month expiry was the most active put with an addition of 0.38 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.00mn) and that for Puts was at 10,500 SP (3.85mn). The respective Support and Resistance levels of Nifty are: Resistance 10,821.78 ---- Pivot Point 10,785.97 --- Support --- 10,735.98.

The Nifty Put Call Ratio (PCR) finally stood at 1.10 for January month contract. The top five scrips with highest PCR on OI were SREI Infrastructure Finance (1.42), Page Industries (1.20), Godfrey Phillips India (1.12), Bharti Infratel (1.05) and TCS (1.00).

Among most active underlying, Reliance Industries witnessed a contraction of 0.23 million units of Open Interest in the January month futures contract, followed by Axis Bank witnessing a contraction of 0.59 million units of Open Interest in the January month contract, ICICI Bank witnessed an addition of 1.36 million units of Open Interest in the January month contract, SBI witnessed a contraction of 1.92 million units of Open Interest in the January month contract and Maruti Suzuki India witnessed a contraction of 0.07 million units of Open Interest in the January month future contract.