Snapping five days winning streak, key equity benchmark -- Nifty -- settled in negative trajectory amid weak global cues after IMF lowered its global growth projections. Index made a caution start, as traders remained concerned with India Ratings’ report warning that with populist decisions like farm loan waivers and other financial support schemes likely to gain significance in the run-up to the forthcoming next general elections, aggregate fiscal deficit of the states is expected to reach 3.2 per cent in FY20. The sentiments remained in lackadaisical mood as the 12 large states grew faster than national GDP in FY18, the same has not translated into job creation, as Gross State Domestic Product (GSDP) expansion has come in from sectors which are less job-intensive. 11 states have recorded lower growth in employment-intensive sectors such as manufacturing, construction and trade, and hotels, transport and communication services, compared with the national rate.
Market pared some of its losses in the last leg of the trade, as traders took some solace with the International Monetary Fund’s (IMF) statement that India will further build its lead as the world’s fastest-growing major economy as it picks up pace next year while the global economy is forecast to slow. India’s GDP is forecast to expand 7.5% in FY20 and 7.7% in FY21, while China’s growth is seen at 6.2% in both years. Some support came with the Reserve Bank of India (RBI) proposing to relax norms for entry of new players in the retail payment systems with a view to give a boost to innovation and competition. The RBI has been issuing guidelines for various payment systems and grants authorisation to non-banks for setting up and operating payment systems.
Traders were seen piling up positions in Pharma, Realty and FMCG, while selling was witnessed in Metal, Media and PSU bank. The top gainers from the F&O segment were Strides Pharma Science, MindTree and InterGlobe Aviation. On the other hand, the top losers were SREI Infrastructure Finance, Jindal Steel & Power and Power 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 decreased by 0.90% and reached 17.99. The 50-share Nifty was down by 39.10 points 0.36% to settle at 10,922.75.
Nifty January 2019 futures closed at 10936.20 on Tuesday, at a premium of 13.45 points over spot closing of 10922.75, while Nifty February 2019 futures ended at 10967.10, at a premium of 44.35 points over spot closing. Nifty January futures saw a contraction of 0.47 million (mn) units, taking the total outstanding open interest (OI) to 24.32 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 7.30 points at 1239.30 compared with spot closing of 1232.00. The numbers of contracts traded were 54,291.
Sun Pharmaceutical Industries January 2019 futures traded at a premium of 2.00 points at 419.40 compared with spot closing of 417.40. The numbers of contracts traded were 36,731.
Yes Bank January 2019 futures traded at a discount of 0.40 points at 193.15 compared with spot closing of 193.55. The numbers of contracts traded were 24,799.
Kotak Mahindra Bank January 2019 futures traded at a premium of 0.15 points at 1291.65 compared with spot closing of 1291.50. The numbers of contracts traded were 23,313.
Asian Paints January 2019 futures traded at a premium of 5.45 points at 1410.30 compared with spot closing of 1404.85. The numbers of contracts traded were 23,128.
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, 10,900 SP from the January month expiry was the most active put with a contraction of 0.51 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (3.38mn) and that for Puts was at 10,500 SP (3.35mn). The respective Support and Resistance levels of Nifty are: Resistance 10,960.32 ---- Pivot Point 10,912.23 --- Support --- 10,874.67.
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 (4.00), KPIT Technologies (1.23), Infosys (1.15), Reliance Industries (1.13) and Torrent Pharmaceuticals (1.09).
Among most active underlying, Reliance Industries witnessed an addition of 0.15 million units of Open Interest in the January month futures contract, followed by Kotak Mahindra Bank witnessing a contraction of 0.22 million units of Open Interest in the January month contract, Asian Paints witnessed an addition of 0.30 million units of Open Interest in the January month contract, Sun Pharmaceutical Industries witnessed a contraction of 6.45 million units of Open Interest in the January month contract and Maruti Suzuki India witnessed an addition of 0.09 million units of Open Interest in the January month future contract.
