Key equity benchmark -- Nifty -- settled lower due to heavy selling by foreign investors after industrial output growth data dropped to a 17-month low. Nifty made a cautious start as investors remained jittery with India’s industrial output hit a 17-month low of 0.5 per cent in November as compared to 8.1 per cent in October mainly on the back of contraction in manufacturing sector, mining, capital goods and consumer durable goods. Traders reacted negatively to a report that meeting the fiscal deficit target of 3.3 per cent of GDP for the current fiscal could be a challenge for the government, given the shortfall in GST collections, rising expenditure and slowing factory output.
Barometer pared some of its losses in the second half of the trade, as investors took some solace with data showing that Inflation based on wholesale prices fell to 8-month low of 3.80 percent in December, 2018, on softening prices of fuel and some food items. Some support also came with Asian Development Bank’s (ADB) report that the Indian economy will grow at 7.3 per cent in FY19. On the back of strong investment and GST stabilisation, the growth will improve to 7.6 per cent in FY20. Investors took note of industry minister Suresh Prabhu’s statement that the government wants to focus on the districts as part of a bottoms-up approach for boosting growth.
All the sectoral indices ended in red on the NSE except Pharma. The top gainers from the F&O segment were Jet Airways (India), Strides Pharma Science and Yes Bank. On the other hand, the top losers were Dish TV India, The Federal Bank and Wipro. 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 5.24% and reached 16.15. The 50-share Nifty was down by 57.35 points 0.53% to settle at 10,737.60.
Nifty January 2019 futures closed at 10769.80 on Monday, at a premium of 32.20 points over spot closing of 10737.60, while Nifty February 2019 futures ended at 10801.95, at a premium of 64.35 points over spot closing. Nifty January futures saw an addition of 0.20 million (mn) units, taking the total outstanding open interest (OI) to 24.78 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 1.30 points at 196.30 compared with spot closing of 195.00. The numbers of contracts traded were 67,203.
Infosys January 2019 futures traded at a discount of 1.25 points at 700.05 compared with spot closing of 701.30. The numbers of contracts traded were 27,621.
Reliance Industries January 2019 futures traded at a premium of 0.55 points at 1099.55 compared with spot closing of 1099.00. The numbers of contracts traded were 17,669.
IndusInd Bank January 2019 futures traded at a premium of 9.40 points at 1492.65 compared with spot closing of 1483.25. The numbers of contracts traded were 16,568.
TCS January 2019 futures traded at a premium of 4.10 points at 1819.55 compared with spot closing of 1815.45. The numbers of contracts traded were 14,639.
Among Nifty calls, 11,000 SP from the January month expiry was the most active call with an addition of 0.23 million open interests. Among Nifty puts, 10,700 SP from the January month expiry was the most active put with an addition of 0.06 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.92mn) and that for Puts was at 10,500 SP (3.84mn). The respective Support and Resistance levels of Nifty are: Resistance 10,799.62 ---- Pivot Point 10,745.98 --- Support --- 10,683.97.
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 Shree Cement (2.00), Ramco Cements (1.10), Godfrey Phillips India (0.98), KPIT Technologies (0.98) and Union Bank of India (0.97).
Among most active underlying, Infosys witnessed a contraction of 3.26 million units of Open Interest in the January month futures contract, followed by Yes Bank witnessing a contraction of 4.10 million units of Open Interest in the January month contract, TCS witnessed a contraction of 0.09 million units of Open Interest in the January month contract, Reliance Industries witnessed a contraction of 1.11 million units of Open Interest in the January month contract and Axis Bank witnessed a contraction of 0.55 million units of Open Interest in the January month future contract.
