Rising for the fourth straight session, key equity benchmark –Nifty--ended slightly higher on Thursday. Market made a positive start, as trader took some encouragement with report that the income tax (I-T) department notified the modified norms for startups to enable them to seek angel tax exemption for investments of up to Rs 25 crore. The modified norms, which are aimed at encouraging budding entrepreneurs, will be effective retrospectively from February 19, when the Department for Promotion of Industry and Internal Trade (DPIIT) relaxed the norms for startups. However, some selling crept in with a report that Process Plant and Machinery Association of India (PPMAI) expressing concern on surge in metal and capital goods imports from countries such as Korea, Indonesia, Malaysia and Japan with whom India has pacts to promote free trade. It said that the Free Trade Agreements (FTAs) along with lack of reciprocity is adversely hurting the steel manufacturers as well as the capital goods industry.
Market remained volatile for the most part of the session , as traders got anxious with Organisation for Economic Co-operation and Development (OECD) warned that trade tensions and political uncertainty including BREXIT are weighing on the world’s economy. OECD lowered its forecast to 3.3 per cent for this year, down from the 3.5 per cent it predicted in November, which was itself a downgrade from a previous 3.7 per cent. But, the barometer gained some traction in the last leg of the session to end the day in green, as traders took some support with credit rating agency, CARE Ratings’ latest report showing that debt quality of Indian companies improved during January-August 2018. CARE Ratings’ Debt Quality Index (CDQI) remained positive in the reported period.
Traders were seen piling up positions in PSU Bank, FMCG and Bank stocks, while selling was witnessed in Media, Pharma and Metal. The top gainers from the F&O segment were Allahabad Bank, NHPC and Arvind. On the other hand, the top losers were Suzlon Energy, BIRLASOFT and Dewan Housing Finance Corporation. In the index option segment, maximum OI continues to be seen in the 11,300-11,700 calls and 10,800 -11,200 puts indicating this is the trading range expectation.
India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 2.03% and reached 15.29. The 50-share Nifty was up by 5.20 points 0.05% to settle at 11,058.20.
Nifty March 2019 futures closed at 11098.20 on Thursday, at a premium of 40.00 points over spot closing of 11058.20, while Nifty April 2019 futures ended at 11148.10, at a premium of 89.90 points over spot closing. Nifty March futures saw a contraction of 0.13 million (mn) units, taking the total outstanding open interest (OI) to 14.57 mn units. The near month derivatives contract will expire on March 28, 2019.
From the most active contracts, Reliance Industries March 2019 futures traded at a premium of 7.00 points at 1277.00 compared with spot closing of 1270.00. The numbers of contracts traded were 24,992.
HDFC Bank March 2019 futures traded at a premium of 1.70 points at 2126.90 compared with spot closing of 2125.20. The numbers of contracts traded were 20,124.
Indiabulls Housing Finance March 2019 futures traded at a premium of 1.85 points at 722.95 compared with spot closing of 721.10. The numbers of contracts traded were 19,842.
Axis Bank March 2019 futures traded at a premium of 1.55 points at 735.80 compared with spot closing of 734.25. The numbers of contracts traded were 17,374.
Yes Bank March 2019 futures traded at a premium of 1.20 points at 233.05 compared with spot closing of 231.85. The numbers of contracts traded were 17,330.
Among Nifty calls, 11,100 SP from the March month expiry was the most active call with an addition of 0.20 million open interests. Among Nifty puts, 11,000 SP from the March month expiry was the most active put with an addition of 0.47 million open interests. The maximum OI outstanding for Calls was at 11,500 SP (2.25mn) and that for Puts was at 11,000 SP (3.39mn). The respective Support and Resistance levels of Nifty are: Resistance 11,089.13 ---- Pivot Point 11,058.12 --- Support --- 11,027.18.
The Nifty Put Call Ratio (PCR) finally stood at 1.37 for March month contract. The top five scrips with highest PCR on OI were Ramco Cements (2.16), Larsen & Toubro (1.64), Cholamandalam Investment and Fin Co (1.30), Bharat Petroleum Corporation (1.29) and Indian Oil Corporation (1.12).
Among most active underlying, Reliance Industries witnessed an addition of 0.25 million units of Open Interest in the March month futures contract, followed by ICICI Bank witnessing a contraction of 0.31 million units of Open Interest in the March month contract, Axis Bank witnessed a contraction of 0.26 million units of Open Interest in the March month contract, State Bank of India witnessed an addition of 0.79 million units of Open Interest in the March month contract and HDFC Bank witnessed an addition of 0.75 million units of Open Interest in the March month future contract.
