Nifty ends lethargic day of trade below 12000 mark

The local benchmark, Nifty continued its southward journey for second consecutive day on Monday and finished the lethargic day of trade with cut of around two percent. Market made a weak start and continued its worst fall till the end of the session, as domestic sentiments remained pessimistic with a report stating that foreign portfolio investors (FPIs) began the year with profit booking as they withdrew a net sum of Rs 2,418 crore from the Indian capital markets in the first three trading sessions of January. Market continued dull trade as economic think tank NIPFP says that states might be facing a consolidated revenue gap of up to Rs 1.23 lakh crore on account of withdrawal of compensation after the five-year GST transition period ends on June 30, 2022. At the time of implementation of the Goods and Services Tax on July 1, 2017, the Centre had promised to compensate states for loss of revenue for five years at an agreed formula.

Market witnessed a sharp losses in the second half of the session, as sentiments were weighed down on the reports that investors wealth tumbled by a whopping Rs 3.11 lakh crore in two successive sessions of decline in the equity market following escalation in tensions in the Middle East. Further, last hour sell-off dragged the market below its crucial psychological level of 12000, as street remained cautions with apex exporters’ body FIEO’s statement that further escalation in the tension between the US and Iran will have implications on India’s exports to the Persian Gulf nation.

All of the NSE sectoral indices ended in red. The top gainers from the F&O segment Titan Company, NIIT Technologies and Godrej Consumer Products. On the other hand, the top losers were Indiabulls Housing Finance, Hindustan Petroleum Corporation and NBCC (India). 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 16.40% and reached 14.77. The 50 share Nifty was down by 233.60 points or 1.91% to settle at 11,993.05.

Nifty January 2020 futures closed at 12040.00 (LTP) on Monday, at a premium of 46.95 points over spot closing of 11993.05, while Nifty February 2020 futures ended at 12081.10 (LTP), at a premium of 88.05 points over spot closing. Nifty December futures saw an addition of 1.68 million (mn) units, taking the total outstanding open interest (OI) to 13.56 mn units. The near month derivatives contract will expire on January 30, 2020 (Provisional).

From the most active contracts, State Bank of India January 2020 futures traded at a premium of 0.80 points at 319.20 (LTP) compared with spot closing of 318.40. The numbers of contracts traded were 28,713 (Provisional). 

Bajaj Finance January 2020 futures traded at a premium of 16.70 points at 4020.70 (LTP) compared with spot closing of 4004.00. The numbers of contracts traded were 26,295 (Provisional).

Indiabulls Housing Finance January 2020 futures traded at a discount of 2.30 points at 300.95 (LTP) compared with spot closing of 303.25. The numbers of contracts traded were 24,940 (Provisional).

Reliance Industries January 2020 futures traded at a premium of 9.50 points at 1509.40 (LTP) compared with spot closing of 1499.90. The numbers of contracts traded were 24,440 (Provisional).

ICICI Bank January 2020 futures traded at a premium of 2.55 points at 528.25 (LTP) compared with spot closing of 525.70. The numbers of contracts traded were 18,287 (Provisional).

Among, Nifty calls, 12300 SP from the January month expiry was the most active call with an addition of 0.63 million open interests. Among Nifty puts, 12000 from the January month expiry was the most active put with an addition of 0.009 units open interests. The maximum OI outstanding for Calls was at 12500 SP (2.63 mn) and that for Puts was at 12000 SP (4.08 mn). The respective Support and Resistance levels of Nifty are: Resistance 12,123.37 -- Pivot Point 12,048.78 -- Support -- 11,918.47.

The Nifty Put Call Ratio (PCR) finally stood at 1.23 for January month contract. The top five scrips with highest PCR on Bajaj Finance (1.12), Shree Cement (1.06), Indian Oil Corporation (1.04), Just Dial (1.04) and UltraTech Cement (1.02).

Among most active underlying, State Bank of India witnessed an addition of 5.48 million units of Open Interest in the January month futures contract, followed by Bajaj Finance witnessing a contraction of 0.16 million units of Open Interest in the January month contract, Reliance Industries witnessed an addition of 1.37 million units of Open Interest in the January month contract, ICICI Bank witnessed an addition of 1.21 million units of Open Interest in the January month contract and Axis Bank witnessed an addition of 0.84 million units of Open Interest in the January month future contract (Provisional).