Nifty makes robust recovery; reclaims 10,800 mark

Key equity benchmark -- Nifty -- made a remarkable comeback and witnessed rally on F&O expiry day, a day ahead of Union Budget 2019. NSE barometer Nifty50 reclaimed the 10,800 mark, registering a gain of over 1.5 per cent. Nifty made a firm start as traders were encouraged with SBI Research’s report that the government meeting the fiscal targets this year and for FY20. Fiscal deficit is likely to be Rs 6.72 trillion or 3.2 percent of GDP, assuming a modest 11.7 percent of nominal GDP growth. It added that for FY19, the fiscal gap will be met at the budgeted 3.3 percent. Traders also took encouragement with Commerce Minister Suresh Prabhu’s statement that the government will release the new e-commerce policy soon which is awaiting approval from the Department of Industrial Policy and Promotion (DIPP).

Barometer enticed some more traction on the streets in the afternoon deals as traders remain energized with a report that the GST officials are working out mechanism to prompt taxmen to initiate profiteering complaints, which could be taken up for further investigation by the Directorate General of Anti-Profiteering. Market continued their rally to reach at fresh intraday high points in last leg of trade, as sentiments remain upbeat with Reserve Bank of India’s report that foreign borrowing of Indian companies nearly trebled from the year-ago period to $3.81 billion in December 2018. Of the total fundraising during last month, $3.77 billion was mobilised through external commercial borrowings (ECBs) in the foreign markets, while $37.04 million was through rupee-denominated bonds (RDBs).

All the sectoral indices ended in green on the NSE except Media. The top gainers from the F&O segment were Hexaware Technologies, Jubilant Foodworks and Bank of India. On the other hand, the top losers were Dewan Housing Finance Corporation, Ajanta Pharma and V-Guard Industries. 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 decreased by 4.08% and reached 17.12. The 50-share Nifty was up by 179.15 points 1.68% to settle at 10,830.95.

Nifty February 2019 futures closed at 10856.20 on Thursday, at a premium of 25.25 points over spot closing of 10830.95, while Nifty March 2019 futures ended at 10879.05, at a premium of 48.10 points over spot closing. Nifty February futures saw an addition of 4.57 million (mn) units, taking the total outstanding open interest (OI) to 17.20 mn units. The near month derivatives contract will expire on February 28, 2019.

From the most active contracts, ICICI Bank February 2019 futures traded at a premium of 0.60 points at 365.30 compared with spot closing of 364.70. The numbers of contracts traded were 40,108.

Yes Bank February 2019 futures traded at a premium of 0.90 points at 194.90 compared with spot closing of 194.00. The numbers of contracts traded were 37,969.

Reliance Industries February 2019 futures traded at a premium of 6.20 points at 1231.40 compared with spot closing of 1225.20. The numbers of contracts traded were 32,672.

HDFC Bank February 2019 futures traded at a premium of 9.10 points at 2082.10 compared with spot closing of 2073.00. The numbers of contracts traded were 30,662.

Indiabulls Housing Finance February 2019 futures traded at a discount of 3.25 points at 658.75 compared with spot closing of 662.00. The numbers of contracts traded were 29,772.

Among Nifty calls, 10,800 SP from the February month expiry was the most active call with an addition of 0.68million open interests. Among Nifty puts, 10,700 SP from the February month expiry was the most active put with an addition of 0.85 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (2.78mn) and that for Puts was at 10,700 SP (3.00mn). The respective Support and Resistance levels of Nifty are: Resistance 10,886.48 ---- Pivot Point 10,782.52 --- Support --- 10,726.98.

The Nifty Put Call Ratio (PCR) finally stood at 1.36 for February month contract. The top five scrips with highest PCR on OI were Ramco Cements (4.20), TCS (3.72), Mangalore Refinery and Petrochemicals (2.75), Bharat Financial Inclusion (2.60), and Adani Enterprises (2.28). 

Among most active underlying, ICICI Bank witnessed an addition of 17.95 million units of Open Interest in the February month futures contract, followed by Axis Bank witnessing an addition of 9.13 million units of Open Interest in the February month contract, Reliance Industries witnessed an addition of 8.20 million units of Open Interest in the February month contract, SBI witnessed a contraction of 13.89 million units of Open Interest in the February month contract and Yes Bank witnessed an addition of 17.14 million units of Open Interest in the February month future contract.