Nifty witness sharp fall in dying hours; ends below 10,800 level

Selling which emerged in last leg of trade mainly played spoil sport for key equity benchmark -- Nifty -- and dragged the index lower on last trading session of the week. Market started the session with marginal gains, as traders took some encouragement with Minister of State for Agriculture Parshottam Rupala’s statement that the government will soon announce a package for farmers to boost their income, amid speculations that the Centre is considering various measures to address distress in the farm sector. Market traded jubilantly in first half of the trade, as traders remain energized with apex exporters’ body, Federation of Indian Export Organisations (FIEO) stating that the tariff war between the US and China is benefitting India as its exports to the neighbouring country have increased by about 32 per cent during the June-November 2018 period to $8.46 billion. Exports to China had stood at $6.37 billion in June-November 2017. Growth in exports to China is beneficial for India as it has huge trade deficit with the neighbouring country.

However, market erased all of its gain and entered into red territory in the last leg of the trading session, as investors turned anxious after Global rating agency Moody’s said that the government policies to support the incomes of small enterprises and low-income households ahead of Lok Sabha elections will make fiscal consolidation harder. It further said that the fiscal deficit may touch 3.4 per cent of gross domestic product (GDP) for year ending March 2019, breach the target of 3.3 per cent. Sentiments also remained downbeat with United Nations head Antonio Guterres’ statement that trade tensions impacting the world economy were essentially a ‘political problem’ and warned that a fragmented response to global challenges was a recipe for disaster.

All the sectoral indices ended in red on the NSE except IT. The top gainers from the F&O segment were Strides Bharti Infratel, IRB Infrastructure Developers and Kaveri Seed Company. On the other hand, the top losers were Dish TV India, Zee Entertainment Enterprises and KPIT Technologies. In the index option segment, maximum OI continues to be seen in the 10,800-11,200 calls and 10,500 -11,000 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 1.46% and reached 17.69. The 50-share Nifty was down by 69.25 points 0.64% to settle at 10,780.55.

Nifty January 2019 futures closed at 10785.95 on Friday, at a premium of 5.40 points over spot closing of 10780.55, while Nifty February 2019 futures ended at 10818.55, at a premium of 38.00 points over spot closing. Nifty January futures saw a contraction of 0.60 million (mn) units, taking the total outstanding open interest (OI) to 23.74 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 discount of 0.20 points at 219.75 compared with spot closing of 219.95. The numbers of contracts traded were 99,263.

Maruti Suzuki India January 2019 futures traded at a premium of 42.55 points at 6512.45 compared with spot closing of 6469.90. The numbers of contracts traded were 70,851.

Zee Entertainment Enterprises January 2019 futures traded at a premium of 19.45 points at 319.15 compared with spot closing of 299.70. The numbers of contracts traded were 70,672.

Reliance Industries January 2019 futures traded at a premium of 1.25 points at 1248.35 compared with spot closing of 1247.10. The numbers of contracts traded were 35,710.

HDFC Bank January 2019 futures traded at a premium of 5.90 points at 2097.95 compared with spot closing of 2092.05. The numbers of contracts traded were 21,762.

Among Nifty calls, 10,900 SP from the January month expiry was the most active call with an addition of 0.72 million open interests. Among Nifty puts, 10,800 SP from the January month expiry was the most active put with a contraction of 0.33 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.43mn) and that for Puts was at 10,800 SP (3.27mn). The respective Support and Resistance levels of Nifty are: Resistance 10,889.35 ---- Pivot Point 10,822.90 --- Support --- 10,714.10.

The Nifty Put Call Ratio (PCR) finally stood at 1.01 for January month contract. The top five scrips with highest PCR on OI were Shree Cement (2.75), Interglobe Aviation (1.32), Wipro (1.15), Torrent Pharmaceuticals (1.14) and Reliance Industries (1.10).

Among most active underlying, Maruti Suzuki India witnessed an addition of 0.06 million units of Open Interest in the January month futures contract, followed by Yes Bank witnessing a contraction of 14.72 million units of Open Interest in the January month contract, Reliance Industries witnessed a contraction of 1.86 million units of Open Interest in the January month contract, Zee Entertainment Enterprises witnessed an addition of 1.46 million units of Open Interest in the January month contract and ICICI Bank witnessed a contraction of 4.27 million units of Open Interest in the January month future contract.