Nifty closes higher for second straight day; reclaims 10,750 mark

Reclaiming its 10,750 mark, Key equity benchmark --Nifty-- ended higher for the second straight session on Thursday, on the back of gains in other Asian markets. Market made a slightly positive start, as traders took some solace with a private report that India will remain the fastest growing major economy, much ahead of China, in the next decade 2019-28. The market soon turned negative with a report that Goods and Services Tax (GST) Council deferred a decision on tax rates on real estate and lottery till February 24, and extended the deadline for businesses to file sales returns for January till February 22 for all states; and February 28 for Jammu & Kashmir.

But, an index erased all of its losses in the early noon deals to settle the session into positive trajectory, as traders got encouraged with the Finance Ministry expecting bad loan recoveries to touch Rs 1.80 lakh crore during the current fiscal with two major cases at the final stage of resolution. Sentiments on the street improved with Prime Minister Narendra Modi’s statement that the Indian economy is based on sound fundamentals and will in the near future double in size to $5 trillion. The government’s decision to infuse Rs 48,239 crore in 12 PSU banks also supported the markets. Investors also took a note of EPFO data showing that employment generation in the formal sector almost trebled to touch a 16-month high of 7.16 lakh in December 2018 compared to 2.37 lakh in the year-ago month.

All sectoral indices ended in green on NSE except IT. The top gainers from the F&O segment were Suzlon Energy, Jaiprakash Associates and Just Dial. On the other hand, the top losers were National Aluminium Company, Infibeam Avenues and InterGlobe Aviation. In the index option segment, maximum OI continues to be seen in the 10,800-11,200 calls and 10,500 -10,900 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 5.88% and reached 16.05. The 50-share Nifty was up by 54.40 points 0.51% to settle at 10,789.85.

Nifty February 2019 futures closed at 10804.45 on Thursday, at a premium of 14.60 points over spot closing of 10789.85, while Nifty March 2019 futures ended at 10842.40 , at a premium of 52.55 points over spot closing. Nifty February futures saw a contraction of 0.79 million (mn) units, taking the total outstanding open interest (OI) to 20.99 mn units. The near month derivatives contract will expire on February 28, 2019.

From the most active contracts, Reliance Industries February 2019 futures traded at a premium of 3.85 points at 1251.15 compared with spot closing of 1247.30. The numbers of contracts traded were 35,740.

Yes Bank February 2019 futures traded at a discount of 0.15 points at 215.35 compared with spot closing of 215.50. The numbers of contracts traded were 27,648.

Indiabulls Housing Finance February 2019 futures traded at a discount of 2.05 points at 683.90 compared with spot closing of 685.95. The numbers of contracts traded were 23,152.

Tech Mahindra February 2019 futures traded at a premium of 0.30 points at 821.95 compared with spot closing of 821.65. The numbers of contracts traded were 21,311.

Tata Consultancy Services February 2019 futures traded at a premium of 4.90 points at 1916.90 compared with spot closing of 1912.00. The numbers of contracts traded were 18,534.

Among Nifty calls, 10,800 SP from the February month expiry was the most active call with a contraction of 0.06 million open interests. Among Nifty puts, 10,700 SP from the February month expiry was the most active put with an addition of 0.75 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.12mn) and that for Puts was at 10,700 SP (3.53mn). The respective Support and Resistance levels of Nifty are: Resistance 10,825.30 ---- Pivot Point 10,773.40 --- Support --- 10,737.95.

The Nifty Put Call Ratio (PCR) finally stood at 1.11 for February month contract. The top five scrips with highest PCR on OI were Shree Cements (2.50), Ramco Cements (1.73), Cipla (1.70), KPIT Technologies (1.65), and GMR Infrastructure (1.62).

Among most active underlying, Reliance Industries witnessed an addition of 4.45 million units of Open Interest in the February month futures contract, followed by Tech Mahindra witnessing a contraction of 0.67 million units of Open Interest in the February month contract, ICICI Bank witnessed a contraction of 2.84 million units of Open Interest in the February month contract, Tata Consultancy Services witnessed a contraction of 0.20 million units of Open Interest in the February month contract and State Bank of India witnessed a contraction of 1.42 million units of Open Interest in the February month future contract.