Nifty manages to end just above neutral line

In volatility trading session, Indian equity benchmark -- Nifty -- erased some of its early gains and ended marginally in green. After making positive start, nifty showed strength in morning trades, as traders took some support with a private report that India is expected to overtake Germany to become fourth-largest economy in 2026 and Japan to become third largest in 2034. It further added India is also set to reach a gross domestic product (GDP) of $5 trillion by 2026, 2 years later than the government’s target. The sentiments continued to remain firm with the industry body CII’s statement that India’s economy is expected to rebound in 2020 on the back of measures taken by the government and the RBI coupled with easing of global trade tensions.

However, sentiments turned pessimistic and market started declining in the afternoon trade, as anxiety spread among the investors with an RBI report stating that the gross non-performing asset (NPA) ratio of banks may increase to 9.9 percent by September 2020 from 9.3 percent in September 2019, due to change in macroeconomic scenario, marginal increase in slippages and the denominator effect of declining credit growth. But in the last leg of the trade, the nifty managed to trim its losses and ended the session just above neutral line, as traders took some solace with Reserve Bank of India (RBI) in latest data has stated that the country’s foreign exchange reserves increased by $456 million to a fresh lifetime high of $454.948 billion in the week to December 20. In the previous week, the reserves had swelled by $1.070 billion to $454.492 billion.

Most of the the NSE sectoral indices ended in green, except Bank, Financial services and IT. The top gainers from the F&O segment Vodafone Idea, Tata Motors and NCC. On the other hand, the top losers were Cummins India, Bank of Baroda and Punjab National Bank. In the index option segment, maximum OI continues to be seen in the 12250 - 12,700 calls and 11,900 - 12,350 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 4.58% and reached 11.00. The 50 share Nifty was up by 10.05 points or 0.08% to settle at 12,255.85.

Nifty January 2020 futures closed at 12332.40 (LTP) on Monday, at a premium of 76.55 points over spot closing of 12255.85, while Nifty February 2020 futures ended at 12370.00 (LTP), at a premium of 114.15 points over spot closing. Nifty December futures saw an addition of 0.14 million (mn) units, taking the total outstanding open interest (OI) to 12.30 mn units. The near month derivatives contract will expire on January 30, 2020 (Provisional).

From the most active contracts, Reliance Industries January 2020 futures traded at a premium of 9.75 points at 1556.00 (LTP) compared with spot closing of 1546.25. The numbers of contracts traded were 19,028 (Provisional).

State Bank of India January 2020 futures traded at a premium of 2.50 points at 336.95 (LTP) compared with spot closing of 334.45. The numbers of contracts traded were 17,368 (Provisional).

ICICI Bank January 2020 futures traded at a premium of 3.65 points at 548.15 (LTP) compared with spot closing of 544.50. The numbers of contracts traded were 14,928 (Provisional).

Indiabulls Housing Finance January 2020 futures traded at a discount of 5.85 points at 300.50 (LTP) compared with spot closing of 306.35. The numbers of contracts traded were 14,898 (Provisional).

Tata Steel January 2020 futures traded at a premium of 3.40 points at 477.50 (LTP) compared with spot closing of 474.10. The numbers of contracts traded were 13,813 (Provisional).

Among, Nifty calls, 12500 SP from the January month expiry was the most active call with an addition of 0.003 million open interests. Among Nifty puts, 12200 from the January month expiry was the most active put with an addition of 0.14 units open interests. The maximum OI outstanding for Calls was at 12500 SP (1.96 mn) and that for Puts was at 12000 SP (3.45 mn). The respective Support and Resistance levels of Nifty are: Resistance 12,290.27 -- Pivot Point 12,252.03 -- Support --12,217.62.

The Nifty Put Call Ratio (PCR) finally stood at 1.18 for January month contract. The top five scrips with highest PCR on Mahindra & Mahindra Financial Services (1.52), UltraTech Cement (1.45), Hindustan Petroleum Corporation (1.25), Tata Consultancy Services (1.17) and Just Dial (1.14).

Among most active underlying, Reliance Industries witnessed an addition of 0.55 million units of Open Interest in the January month futures contract, followed by State Bank of India witnessing an addition of 0.70 million units of Open Interest in the January month contract, Axis Bank witnessed an addition of 0.12 million units of Open Interest in the January month contract, ICICI Bank witnessed an addition of 1.80 million units of Open Interest in the January month contract and Tata Motors witnessed an addition of 2.06 million units of Open Interest in the January month future contract (Provisional).