Nifty ends tad below neutral line; amid mixed global cues

Key equity benchmark -- Nifty -- made a smart recovery in the dying hour of the trade and ended Tuesday’s trading session just below the neutral line. Nifty made a cautions start as traders remained concerned due weak global cues as hopes of US-China trade deal were again hit after the United States charged Chinese telecom firm Huawei with bank fraud and for conspiring to steal trade secrets. Nifty makes small recovery to enter into green, as traders took some solace with the Reserve Bank of India’s (RBI) latest data showing that foreign direct investment (FDI) during the previous fiscal grew 18 per cent to Rs 28.25 lakh crore. As per data, FDI increased by Rs 4,33,300 crore, including revaluation of past investments, during 2017-18 to reach Rs 28,24,600 crore in March 2018 at market value.

Market once again slipped into red trajectory and extended losses in the afternoon session, as traders’ sentiments remained dampened ahead of Budget announcements due later this week. Pessimism over some heavyweight Q3 corporate results too weighed on the sentiment. However, market erased most of its losses in the dying hours of the trade, as investors found solace with commerce ministry’s report that India and China have held wide ranging discussions on various issues, including providing market access to domestic products in the neighboring country. Besides, a private report also stated that India wants to triple exports to Argentina, eyeing an additional $1.5 billion worth of shipments, and is seeking market access for apparel, textiles, folding bicycles and home furnishing products in the South American country.

Traders were seen piling up positions in Pharma, IT and FMCG, while selling was witnessed in Realty, Financial services and Bank. The top gainers from the F&O segment were Strides Bank of India, Adani Power and The India Cements. On the other hand, the top losers were Dish TV India, Dewan Housing Finance Corporation and Eicher Motors. 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 2.49% and reached 18.42. The 50-share Nifty was down by 9.35 points 0.09% to settle at 10,652.20.

Nifty January 2019 futures closed at 10668.05 on Tuesday, at a premium of 15.85 points over spot closing of 10652.20, while Nifty February 2019 futures ended at 10699.20, at a premium of 47.00 points over spot closing. Nifty January futures saw a contraction of 4.14 million (mn) units, taking the total outstanding open interest (OI) to 17.93 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 2.05 points at 203.45 compared with spot closing of 205.50. The numbers of contracts traded were 59,313.

Bajaj Finance January 2019 futures traded at a discount of 41.95 points at 2526.00 compared with spot closing of 2567.95. The numbers of contracts traded were 54,710.

Dewan Housing Finance Corporation January 2019 futures traded at a discount of 4.65 points at 167.70 compared with spot closing of 172.35. The numbers of contracts traded were 45,040.

Reliance Industries January 2019 futures traded at a discount of 1.10 points at 1213.80 compared with spot closing of 1214.90. The numbers of contracts traded were 41,100.

Indiabulls Housing Finance January 2019 futures traded at a discount of 22.85 points at 698.70 compared with spot closing of 721.55. The numbers of contracts traded were 35,021.

Among Nifty calls, 10,700 SP from the January month expiry was the most active call with an addition of 4.25 million open interests. Among Nifty puts, 10,600 SP from the January month expiry was the most active put with a contraction of 0.04 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.45mn) and that for Puts was at 10,500 SP (2.70mn). The respective Support and Resistance levels of Nifty are: Resistance 10,700.48 ---- Pivot Point 10,642.07 --- Support --- 10,593.78.

The Nifty Put Call Ratio (PCR) finally stood at 0.83 for January month contract. The top five scrips with highest PCR on OI were TCS (1.27), Wipro (1.26), Shree Cement (1.25), Interglobe Aviation (1.20), and Torrent Pharmaceuticals (1.15).

Among most active underlying, Reliance Industries witnessed a contraction of 9.04 million units of Open Interest in the January month futures contract, followed by Bajaj Finance witnessing a contraction of 0.54 million units of Open Interest in the January month contract, Yes Bank witnessed a contraction of 24.20 million units of Open Interest in the January month contract, HDFC witnessed a contraction of 4.74 million units of Open Interest in the January month contract and Maruti Suzuki India witnessed a contraction of 0.67 million units of Open Interest in the January month future contract.