NSE barometer Nifty50 plunged over a percent on first trading session of the week, as traders’ sentiment turned volatile days ahead of the Union Budget. Heavy selling in Financials, Auto and Pharma counters too dampened sentiments. Index made a gap down start as market participants remained cautions with Moody’s Investors Service’s statement that the steps announced by the government to aid MSMEs and the measures being planned to support farmers will increase the risk of fiscal slippage and push deficit to 3.4 per cent of GDP in the current financial year. The government budgeted the fiscal deficit for the current financial year at 3.3 per cent of the gross domestic product (GDP). Adding some worries on the street, a report stated that foreign investors have pulled out close to Rs 6,000 crore so far from the Indian stock markets in January and experts believe this trend will continue in the coming months as well.
Market continued sluggish trend in second half of the session, as sentiments remained down-beat with a private report stating that the economy is likely to lose steam and may clip at 6.6 percent in the first half of 2019 from 7.4 percent a year ago, on account of the global slowdown and the uncertainty about the outcome of the forthcoming general elections. Investors were also on the backfoot as another private report showed that the government is set breach the fiscal deficit target yet again by 40 bps for 2018-19, and raise the target to 3.5 percent for next fiscal in the forthcoming budget that may be skewed towards the rural economy.
All the sectoral indices ended in red on the NSE except IT and Media. The top gainers from the F&O segment were Strides Zee Entertainment Enterprises, Dish TV India and Sun TV Network. On the other hand, the top losers were Adani Power, Adani Ports and Special Economic Zone 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 6.83% and reached 18.89. The 50-share Nifty was down by 119.00 points 1.10% to settle at 10,661.55.
Nifty January 2019 futures closed at 10676.80 on Monday, at a premium of 15.25 points over spot closing of 10661.55, while Nifty February 2019 futures ended at 10711.25, at a premium of 49.70 points over spot closing. Nifty January futures saw a contraction of 1.67 million (mn) units, taking the total outstanding open interest (OI) to 22.07 mn units. The near month derivatives contract will expire on January 31, 2019.
From the most active contracts, Zee Entertainment Enterprises January 2019 futures traded at a premium of 4.00 points at 372.50 compared with spot closing of 368.50. The numbers of contracts traded were 79,295.
Yes Bank January 2019 futures traded at a discount of 0.30 points at 207.70 compared with spot closing of 208.00. The numbers of contracts traded were 51,783.
Reliance Industries January 2019 futures traded at a premium of 1.55 points at 1232.05 compared with spot closing of 1230.50. The numbers of contracts traded were 41,104.
Maruti Suzuki India January 2019 futures traded at a premium of 15.80 points at 6526.30 compared with spot closing of 6510.50. The numbers of contracts traded were 36,380.
ICICI Bank January 2019 futures traded at a discount of 0.25 points at 344.50 compared with spot closing of 344.75. The numbers of contracts traded were 29,557.
Among Nifty calls, 10,800 SP from the January month expiry was the most active call with an addition of 1.00 million open interests. Among Nifty puts, 10,700 SP from the January month expiry was the most active put with a contraction of 0.39 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (5.02mn) and that for Puts was at 10,500 SP (2.84mn). The respective Support and Resistance levels of Nifty are: Resistance 10,767.02 ---- Pivot Point 10,698.98 --- Support --- 10,593.52.
The Nifty Put Call Ratio (PCR) finally stood at 0.86 for January month contract. The top five scrips with highest PCR on OI were Shree Cement (1.75), Interglobe Aviation (1.23), Wipro (1.11), Torrent Pharmaceuticals (1.11) and Ramco Cements (1.08).
Among most active underlying, Reliance Industries witnessed a contraction of 7.46 million units of Open Interest in the January month futures contract, followed by Zee Entertainment Enterprises witnessing a contraction of 3.11 million units of Open Interest in the January month contract, ICICI Bank witnessed a contraction of 14.22 million units of Open Interest in the January month contract, Maruti Suzuki India witnessed a contraction of 0.34 million units of Open Interest in the January month contract and Yes Bank witnessed a contraction of 29.21 million units of Open Interest in the January month future contract.
