After a see-saw session, key equity benchmark -- Nifty -- ended marginally in green, with Nifty ending near 10,900-mark tracking mixed global cues. Index made a positive start, as investors remain encouraged with the Reserve Bank of India’s (RBI) statement that it would inject Rs 10,000 crore into the system through purchase of government securities on January 17 to increase liquidity. The purchase will be made through open market operations (OMOs). The RBI plans to inject liquidity under OMOs for Rs 50,000 crore in January 2019. The central bank has so far injected Rs 20,000 through OMOs in January. Adding to the optimism a private report stated that India’s partnership with Africa based on a consultative model of cooperation, non-prescriptive, participative, and responsive to the needs of the African countries, witnessed an increase in bilateral trade of nearly 22% from the last year.
Market erased most of its gain to end tad above its neutral line, as sentiments turned cautious with ICRA’s latest report indicating that a recent policy change favouring advanced degree holders for visas in US will lead to a hit on IT companies' profitability as the number of H1-B visas approved gets reduced. Sentiment on the street weakened as merchandise export growth slowed for a second straight month to just 0.34% in December 2018, while imports contracted by 2.44%, the first drop since September 2016, narrowing trade deficit to $13.1 billion, its lowest since February 2018.
Traders were seen piling up positions in PSU Bank, PVT Bank and Pharma, while selling was witnessed in Media, FMCG and Metal. The top gainers from the F&O segment were InterGlobe Aviation, Reliance Communications and Just Dial. On the other hand, the top losers were Jet Airways (India), Cummins India and Infibeam Avenues. 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 3.18% and reached 16.07. The 50-share Nifty was up by 3.50 points 0.03% to settle at 10,890.30.
Nifty January 2019 futures closed at 10921.65 on Wednesday, at a premium of 31.35 points over spot closing of 10890.30, while Nifty February 2019 futures ended at 10952.20, at a premium of 61.90 points over spot closing. Nifty January futures saw a contraction of 0.48 million (mn) units, taking the total outstanding open interest (OI) to 25.04 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 1.15 points at 208.95 compared with spot closing of 207.80. The numbers of contracts traded were 34,436.
Reliance Industries January 2019 futures traded at a premium of 3.45 points at 1139.95 compared with spot closing of 1136.50. The numbers of contracts traded were 33,274.
Zee Entertainment Enterprises January 2019 futures traded at a premium of 2.60 points at 454.40 compared with spot closing of 451.80. The numbers of contracts traded were 21,757.
KPIT Technologies January 2019 futures traded at a discount of 0.25 points at 216.35 compared with spot closing of 216.60. The numbers of contracts traded were 13,438.
HDFC Bank January 2019 futures traded at a premium of 5.60 points at 2122.60 compared with spot closing of 2117.00. The numbers of contracts traded were 12,624.
Among Nifty calls, 11,000 SP from the January month expiry was the most active call with a contraction of 0.41 million open interests. Among Nifty puts, 10,900 SP from the January month expiry was the most active put with an addition of 0.21 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (3.64mn) and that for Puts was at 10,500 SP (4.02mn). The respective Support and Resistance levels of Nifty are: Resistance 10,920.00 ---- Pivot Point 10,898.45 --- Support --- 10,868.75.
The Nifty Put Call Ratio (PCR) finally stood at 1.30 for January month contract. The top five scrips with highest PCR on OI were Shree Cement (2.00), KPIT Technologies (1.81), Infosys (1.35), Union Bank of India (1.11) and Torrent Pharmaceuticals (1.09).
Among most active underlying, Reliance Industries witnessed a contraction of 3.15 million units of Open Interest in the January month futures contract, followed by Infosys witnessing an addition of 0.99 million units of Open Interest in the January month contract, Zee Entertainment Enterprises witnessed an addition of 0.53 million units of Open Interest in the January month contract, ICICI Bank witnessed an addition of 0.64 million units of Open Interest in the January month contract and Yes Bank witnessed a contraction of 8.98 million units of Open Interest in the January month future contract.
