Nifty ends volatile session flat; holds 10,650 mark

Key equity benchmark -- Nifty -- ended highly volatile session on a flat note, as cautious investors refrained from taking any bets ahead of January derivatives expiry. Index made a gap-up start as traders remain energized with ICRA’s report that while the number of insolvency cases are expected to pile up over the next few quarters, timely conclusion of cases within the law mandated 180-270 days can free up as much as Rs 67,000 crore to the system. Some comfort also came with the annual index releasing by an anti-graft watchdog that India has improved its ranking on a global corruption index in 2018, while its neighbour China lagged far behind.

However, market erased all the gains to turn negative trajectory in the afternoon session, as sentiments remained down-beat with report that the United States and China launch a critical round of trade talks amid deep differences over US demands for structural economic reforms from Beijing that will make it difficult to reach a deal before a March 2 US tariff hike. Market regained from the early losses and managed to end session on a flat note, as traders found solace with the Reserve Bank of India’s (RBI) statement that it will inject Rs 37,500 crore into the system through the purchase of government securities in February to increase liquidity. The RBI also said it has been monitoring the evolving liquidity conditions and durable liquidity requirements of the system.

Traders were seen piling up positions in PSU bank, Metal and Media, while selling was witnessed in FMCG, Realty and Pharma. The top gainers from the F&O segment were Dish TV India, ICICI Bank and Tata Steel. On the other hand, the top losers were Godrej Consumer Products, PTC India and Dewan Housing Finance Corporation. In the index option segment, maximum OI continues to be seen in the 10,600-11,000 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 3.13% and reached 17.85. The 50-share Nifty was down by 0.40 points to settle at 10,651.80.

Nifty January 2019 futures closed at 10642.90 on Wednesday, at a discount of 8.90 points over spot closing of 10651.80, while Nifty February 2019 futures ended at 10673.00, at a premium of 21.20 points over spot closing. Nifty January futures saw a contraction of 2.19 million (mn) units, taking the total outstanding open interest (OI) to 15.74 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 premium of 0.05 points at 199.40 compared with spot closing of 199.35. The numbers of contracts traded were 48,140.

Axis Bank January 2019 futures traded at a discount of 1.60 points at 689.40 compared with spot closing of 691.00. The numbers of contracts traded were 45,679.

ICICI Bank January 2019 futures traded at a discount of 2.20 points at 366.20 compared with spot closing of 368.40. The numbers of contracts traded were 38,361.

Reliance Industries January 2019 futures traded at a discount of 0.10 points at 1195.65 compared with spot closing of 1195.75. The numbers of contracts traded were 37,464.

Bajaj Finance January 2019 futures traded at a premium of 19.10 points at 2594.10 compared with spot closing of 2575.00. The numbers of contracts traded were 34,857.

Among Nifty calls, 10,700 SP from the January month expiry was the most active call with an addition of 0.12 million open interests. Among Nifty puts, 10,600 SP from the January month expiry was the most active put with an addition of 0.03 million open interests. The maximum OI outstanding for Calls was at 10,800 SP (4.11mn) and that for Puts was at 10,500 SP (2.64mn). The respective Support and Resistance levels of Nifty are: Resistance 10,703.72 ---- Pivot Point 10,658.28 --- Support --- 10,606.37.

The Nifty Put Call Ratio (PCR) finally stood at 0.80 for January month contract. The top five scrips with highest PCR on OI were Wipro (1.48), Shree Cement (1.25), TCS (1.16), Interglobe Aviation (1.14), and Kajaria Ceramics (1.09).

Among most active underlying, Axis Bank witnessed a contraction of 8.01 million units of Open Interest in the January month futures contract, followed by ICICI Bank witnessing a contraction of 13.51 million units of Open Interest in the January month contract, Reliance Industries witnessed a contraction of 7.29 million units of Open Interest in the January month contract, State Bank of India witnessed a contraction of 13.77 million units of Open Interest in the January month contract and Bajaj Finance witnessed a contraction of 2.49 million units of Open Interest in the January month future contract.