Nifty edge higher on Friday; settles above 10,850 mark

Key equity benchmark --Nifty-- snapped its three-session losing run and ended last day of the trading week on a higher note. Market made an optimistic start as traders were encouraged with the World Bank’s report that increasing exports can lead to better jobs and higher wages in India, including more formal sector employment for youth and women. Sentiment on the street improved as Finance Minister Arun Jaitley expressed hopes that the remaining six public sector banks (PSBs) under the Reserve Bank of India’s (RBI) prompt corrective action (PCA) framework will soon come out of it with the government commitment of support to them.

Market extended its gains in the last leg of the session as traders got encouraged with a report that manufacturing activity in India improved at a 14-month high in February, accelerated by an increase in sales which fuelled growth of output and employment. The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) rose to 54.3 in February, up from 53.9 in January. Local investors cheered with Moody's report stating that the Indian economy is expected to grow at 7.3 per cent in calendar year 2019 and 2020, and the government spending announced ahead of elections this year will support near-term growth.

All sectoral indices ended in green on NSE. The top gainers from the F&O segment were Reliance Power, CG Power and Industrial Solutions and Oriental Bank of Commerce. On the other hand, the top losers were Bharti Airtel, Nestle India and Marico. 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 10.96% and reached 16.27. The 50-share Nifty was up by 71.00 points 0.66% to settle at 10,863.50.

Nifty March 2019 futures closed at 10917.05 on Friday, at a premium of 53.55 points over spot closing of 10863.50, while Nifty April 2019 futures ended at 10965.50, at a premium of 102.00 points over spot closing. Nifty March futures saw a contraction of 0.01 million (mn) units, taking the total outstanding open interest (OI) to 14.25 mn units. The near month derivatives contract will expire on March 28, 2019.

From the most active contracts, Yes Bank March 2019 futures traded at a premium of 2.00 points at 238.90 compared with spot closing of 236.90. The numbers of contracts traded were 25,481.

Tata Motors March 2019 futures traded at a premium of 1.15 points at 181.20 compared with spot closing of 180.05. The numbers of contracts traded were 21,444.

Reliance Industries March 2019 futures traded at a premium of 9.95 points at 1234.95 compared with spot closing of 1225.00. The numbers of contracts traded were 21,388.

Bharti Airtel March 2019 futures traded at a discount of 0.75 points at 307.25 compared with spot closing of 308.00. The numbers of contracts traded were 20,466.

Maruti Suzuki India March 2019 futures traded at a premium of 41.25 points at 6980.20 compared with spot closing of 6938.95. The numbers of contracts traded were 20,242.

Among Nifty calls, 10,900 SP from the March month expiry was the most active call with addition of 0.14 million open interests. Among Nifty puts, 10,800 SP from the March month expiry was the most active put with an addition of 0.24 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (1.88mn) and that for Puts was at 10,700 SP (2.52mn). The respective Support and Resistance levels of Nifty are: Resistance 10,886.57 ---- Pivot Point 10,854.83 --- Support --- 10,831.77.

The Nifty Put Call Ratio (PCR) finally stood at 1.33 for March month contract. The top five scrips with highest PCR on OI were Birlasoft (2.45), Ramco Cements (2.05), Gujarat State Fertilizers&Chemicals (1.48), Amara Raja Batteries (1.43) and Interglobe Aviation (1.40).

Among most active underlying, Reliance Industries witnessed an addition of 1.47 million units of Open Interest in the March month futures contract, followed by Maruti Suzuki India witnessing an addition of 0.04 million units of Open Interest in the March month contract, ICICI Bank witnessed a contraction of 0.51 million units of Open Interest in the March month contract, Yes Bank witnessed an addition of 0.38 million units of Open Interest in the March month contract and State Bank of India witnessed an addition of 3.82 million units of Open Interest in the March month future contract.