Key equity benchmark --Nifty-- wiped off all early morning gains to end Wednesday’s trading session on negative note as Indo-Pak tension escalates. Barometer made a positive start, as local investors cheered with the Reserve Bank of India (RBI) report stating that it would infuse Rs 12,500 crore into the system through open market operations. The decision on OMO is based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward. Some additional support came with a report that consumer market is expected to grow at 12 percent annually over the next decade and touch Rs 335 lakh crore. The consumer market was around Rs 110 lakh crore in 2018, clipping past 13 percent annually in the past decade when it stood at Rs 31 lakh crore in 2008.
Market erased all of its gain and turned negative in afternoon trade, as traders turned cautious with the government data showing that fiscal deficit touched 121.5 percent of the full-year revised target of Rs 6.34 lakh crore at the end of January on account of lower revenue collections. The fiscal deficit, or the gap between the government's expenditure and revenue, stood at Rs 7.70 lakh crore during April-January of the current financial year ending March. Sentiments remain dampened with the government detected Rs 20,000 crore worth GST evasion so far this fiscal and will take more steps to check frauds and increase compliance. But, market managed to cut some losses in last hour of trade as investors found some support with a private report that the government is likely to transfer Rs 2,000 each to at least 10 million more farmers, carrying forward the PM-KISAN scheme that Prime Minister Narendra Modi has launched.
Traders were seen piling up positions in PSU Bank, Pharma and Auto stocks, while selling was witnessed in Media, Bank and IT. The top gainers from the F&O segment were Allahabad Bank, Canara Bank and PC Jeweller. On the other hand, the top losers were Reliance Infrastructure, Bharti Infratel and Vedanta. In the index option segment, maximum OI continues to be seen in the 10,800-11,200 calls and 10,300 -10,500 puts indicating this is the trading range expectation.
India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 10.41% and reached 18.89. The 50-share Nifty was down by 28.65 points 0.26% to settle at 10,806.65.
Nifty February 2019 futures closed at 10809.45 on Wednesday, at a premium of 2.80 points over spot closing of 10806.65, while Nifty March 2019 futures ended at 10851.00, at a premium of 44.35 points over spot closing. Nifty February futures saw a contraction of 2.34 million (mn) units, taking the total outstanding open interest (OI) to 12.15 mn units. The near month derivatives contract will expire on February 28, 2019.
From the most active contracts, Yes Bank February 2019 futures traded at a premium of 0.70 points at 228.30 compared with spot closing of 227.60. The numbers of contracts traded were 51,396.
Reliance Industries February 2019 futures traded at a premium of 2.75 points at 1223.40 compared with spot closing of 1220.65. The numbers of contracts traded were 48,124.
Tata Consultancy Services February 2019 futures traded at a premium of 5.55 points at 2058.05 compared with spot closing of 2052.50. The numbers of contracts traded were 30,194.
Sun Pharmaceutical Industries February 2019 futures traded at a premium of 0.40 points at 441.75 compared with spot closing of 441.35. The numbers of contracts traded were 25,148.
Axis Bank February 2019 futures traded at a discount of 0.20 points at 716.80 compared with spot closing of 717.00. The numbers of contracts traded were 24,294.
Among Nifty calls, 10,900 SP from the February month expiry was the most active call with addition of 0.16 million open interests. Among Nifty puts, 10,800 SP from the February month expiry was the most active put with a contraction of 0.53 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.91mn) and that for Puts was at 10,400 SP (3.03mn). The respective Support and Resistance levels of Nifty are: Resistance 10,913.83 ---- Pivot Point 10,832.52 --- Support --- 10,725.33.
The Nifty Put Call Ratio (PCR) finally stood at 0.97 for February month contract. The top five scrips with highest PCR on OI were GMR Infrastructure (2.20), Cipla (1.58), Tata Consultancy Services (1.56), Hindustan Zinc (1.38) and Ambuja Cements (1.34).
Among most active underlying, Reliance Industries witnessed a contraction of 9.28 million units of Open Interest in the February month futures contract, followed by Yes Bank witnessing a contraction of 20.84 million units of Open Interest in the February month contract, ICICI Bank witnessed a contraction of 26.30 million units of Open Interest in the February month contract, Axis Bank witnessed a contraction of 7.04 million units of Open Interest in the February month contract and State Bank of India witnessed a contraction of 17.91 million units of Open Interest in the February month future contract.
