Key equity benchmark -- Nifty -- witnessed worst single-day performance in seven weeks led by a sharp sell-off in Metal and Auto stocks amid negative cues from the global markets. Nifty ended sharply lower on the last day of the trading week, gave up the psychological 11,000-mark. Barometer made a gap-down start as traders remained deeply negative with disappointing third quarter number by Tata Motors. The company reported a consolidated net loss of Rs 26,960 crore for the third quarter of this fiscal due to asset impairment in its British arm Jaguar Land Rover (JLR). Investors ignored Finance Minister Piyush Goyal’s statement that the rate cut by the RBI will give a boost to the economy by providing affordable credit to small businesses and homebuyers. The RBI has reduced repo rate (at which RBI lends to banks) by 0.25% to 6.25%, a move that will translate into softening interest rates.
Key gauges extended southern journey in the second half of the trade, as investors’ sentiment weakened further with report that India is unlikely to achieve its target of 100 gigawatt (GW) solar electricity capacity as it faces short-term uncertainty due to imposition of various taxes. Traders ignored a report that India has jumped eight places to 36th position on the International Intellectual Property (IP) Index, which analyses the IP climate in 50 global economies, this year. India's eight-point jump in 2019 from 44th position in 2018 is the highest increase among 50 nations mapped by the index.
All sectoral indices ended in red on NSE except Realty. The top gainers from the F&O segment were Reliance Capital, Reliance Power and Bharti Infratel. On the other hand, the top losers were Tata Motors, Tata Motors-DVR and Union Bank of India. In the index option segment, maximum OI continues to be seen in the 10,800-11,200 calls and 10,200 -10,600 puts indicating this is the trading range expectation.
India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 0.86% and reached 15.56. The 50-share Nifty was down by 125.80 points 1.14% to settle at 10,943.60.
Nifty February 2019 futures closed at 10957.25 on Friday, at a premium of 13.65 points over spot closing of 10943.60, while Nifty March 2019 futures ended at 10988.35, at a premium of 44.75 points over spot closing. Nifty February futures saw a contraction of 21.00 million (mn) units, taking the total outstanding open interest (OI) to 0.24 mn units. The near month derivatives contract will expire on February 28, 2019.
From the most active contracts, Tata Motors February 2019 futures traded at a premium of 0.75 points at 150.90 compared with spot closing of 150.15. The numbers of contracts traded were 67,893.
Indiabulls Housing Finance February 2019 futures traded at a discount of 3.90 points at 603.40 compared with spot closing of 607.30. The numbers of contracts traded were 35,472.
Reliance Capital February 2019 futures traded at a discount of 0.05 points at 129.75 compared with spot closing of 129.80. The numbers of contracts traded were 29,920.
Reliance Industries February 2019 futures traded at a premium of 3.90 points at 1281.70 compared with spot closing of 1277.80. The numbers of contracts traded were 25,910.
Yes Bank February 2019 futures traded at a premium of 0.45 points at 175.55 compared with spot closing of 175.10. The numbers of contracts traded were 23,366.
Among Nifty calls, 11,100 SP from the February month expiry was the most active call with an addition of 0.31 million open interests. Among Nifty puts, 11,000 SP from the February month expiry was the most active put with a contraction of 0.73 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (3.73mn) and that for Puts was at 10,400 SP (3.15mn). The respective Support and Resistance levels of Nifty are: Resistance 11,014.72 ---- Pivot Point 10,970.08 --- Support --- 10,898.97.
The Nifty Put Call Ratio (PCR) finally stood at 1.33 for February month contract. The top five scrips with highest PCR on OI were Shree Cements (2.50), TCS (2.35), Page Industries (2.25) Cipla (1.91) and Ramco Cements (1.41).
Among most active underlying, Tata Motors witnessed an addition of 2.53 million units of Open Interest in the February month futures contract, followed by Reliance Industries witnessing a contraction of 0.31 million units of Open Interest in the February month contract, State Bank of India witnessed a contraction of 3.16 million units of Open Interest in the February month contract, Axis Bank witnessed a contraction of 0.46 million units of Open Interest in the February month contract and ICICI Bank witnessed a contraction of 0.44 million units of Open Interest in the February month future contract.
