Nifty reverses losses to end near intraday high point

Domestic index--Nifty--shot up in the last leg of trade and finished the day’s trade with gains of around half a percent on Wednesday. After getting a positive start, market showed some strength in morning trade, as traders took some support with Nitin Gadkari’s statement that the government would spend a whopping Rs 5 trillion over the next two years in infrastructure projects to spur the economy and create thousands of jobs. However, index turned volatile in noon deals, as Asian Development Bank (ADB) lowered its forecast for India to 5.1% for 2019 from its September estimates of 6.5% as the foundering of a major nonbanking financial company in 2018 led to a rise in risk aversion in the financial sector and a credit crunch.

In the second half of the trading session, key index turned negative for a short period, as traders remained concerned with former chief statistician of India, Pronab Sen’s statement that India's GDP growth is likely to hit a decade low of 4.5% in the current financial year ending March, and the government should stick to its Budgeted expenditure plan even if it means fiscal slippage. But, Nifty witnessed some buying activity in the last leg of trade and hit intraday high, taking support with Commerce Minister Piyush Goyal’s statement that the government has carried out a number of reforms in various sectors and it is a continuous process for improvement in the economy.

All the NSE sectoral indices ended in green, except Metal and PSU Bank. The top gainers from the F&O segment Manappuram Finance, GAIL (India) and Zee Entertainment Enterprises. On the other hand, the top losers were Yes Bank, Equitas Holdings and Castrol India. In the index option segment, maximum OI continues to be seen in the 11800 - 12,300 calls and 11,000 - 12,000 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 8.01% and reached 13.14.The 50 share Nifty was up by 53.35 points or 0.45% to settle at 11,910.15.

Nifty December 2019 futures closed at 11942.00 (LTP) on Wednesday, at a premium of 31.85 points over spot closing of 11910.15, while Nifty January 2019 futures ended at 11989.10 (LTP), at a premium of 78.95 points over spot closing. Nifty December futures saw an addition of 0.55 million (mn) units, taking the total outstanding open interest (OI) to 13.96 mn units. The near month derivatives contract will expire on December 26, 2019 (Provisional).

From the most active contracts, Yes Bank December 2019 futures traded at a discount of 3.90 points at 39.65 (LTP) compared with spot closing of 43.55. The numbers of contracts traded were 1, 52,010 (Provisional).

Indiabulls Housing Finance December 2019 futures traded at a discount of 0.40 points at 269.35 (LTP) compared with spot closing of 269.75. The numbers of contracts traded were 39,179 (Provisional).

State Bank of India December 2019 futures traded at a premium of 0.30 points at 312.05 (LTP) compared with spot closing of 311.75. The numbers of contracts traded were 38,297 (Provisional).

Reliance Industries December 2019 futures traded at a premium of 4.80 points at 1565.80 (LTP) compared with spot closing of 1561.00. The numbers of contracts traded were 22,021 (Provisional).

ICICI Bank December 2019 futures traded at a premium of 1.85 points at 535.50 (LTP) compared with spot closing of 533.65. The numbers of contracts traded were 21,258 (Provisional).

Among, Nifty calls, 12000 SP from the December month expiry was the most active call with an addition of 0.10 million open interests. Among Nifty puts, 11900 from the December month expiry was the most active put with an addition of 0.36 units open interests. The maximum OI outstanding for Calls was at 12000 SP (28.06 mn) and that for Puts was at 11500 SP (33.35 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,944.80 --Pivot Point 11,888.55 --Support --11,853.90.

The Nifty Put Call Ratio (PCR) finally stood at 1.17 for December month contract. The top five scrips with highest PCR on Shree Cement (1.50), Just Dial (1.25), Shriram Transport Finance Company (1.23), ICICI Bank (0.92) and Bharti Airtel (0.90).

Among most active underlying, State Bank of India witnessed an addition of 11.36 million units of Open Interest in the December month futures contract, followed by Reliance Industries witnessing an addition of 3.19 million units of Open Interest in the December month contract, Yes Bank witnessed an addition of 47.11 million units of Open Interest in the December month contract, ICICI Bank witnessed an addition of 2.37 million units of Open Interest in the December month contract and Housing Development Finance Corporation witnessed an addition of 2.41 million units of Open Interest in the December month future contract (Provisional).