Nifty finishes Tuesday’s session on optimistic note

Tracking positive cues from global market, key equity benchmark -- Nifty -- reclaimed its crucial 12050 mark on Tuesday. The barometer started day’s trade on a strong note with report that with an aim to ensure expeditious resolution of financial stress, the Reserve Bank of India (RBI) has revised the Supervisory Action Framework (SAF) for urban cooperative banks (UCBs). The Apex bank will continue to monitor asset quality, profitability and capital/net worth of UCBs under the revised SAF. Trade brought some more cheer to the market with Commerce and Industry Minister Piyush Goyal’s statement that use of artificial intelligence (AI) in different forms can help achieve the target of making India a $5 trillion economy in the coming years.

In the late afternoon session, the market trimmed some of its initial gains, with private report that India's government is likely to cut spending for the current fiscal year by as much as Rs 2 lakh crore ($27.82 billion) as it faces one of the biggest tax shortfalls in recent year. It added that Asia's third largest economy, which is growing at its slowest pace in over six years because of lack of private investment, could be hurt further if the government cuts spending. Finally, Nifty ended the day’s trade with a gain of 59.90 points, as traders were looking forward to the release of the first advance estimates of the GDP for FY20 by the government later in the day. The estimates will be keenly watched for as the economic turbulence has taken a toll on growth numbers in the first and the second quarter.

All of the NSE sectoral indices ended in green. The top gainers from the F&O segment The Ramco Cements, Shree Cement and Vedanta. On the other hand, the top losers were Bharti Infratel, Biocon and Bharat Petroleum Corporation. 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 decreased by 1.13% and reached 14.61. The 50 share Nifty was up by 59.90 points or 0.50% to settle at 12,052.95.

Nifty January 2020 futures closed at 12113.50 (LTP) on Tuesday, at a premium of 60.55 points over spot closing of 12052.95, while Nifty February 2020 futures ended at 12154.45 (LTP), at a premium of 101.50 points over spot closing.Nifty December futures saw an addition of 0.61 million (mn) units, taking the total outstanding open interest (OI) to 12.61 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 1.70 points at 319.60 (LTP) compared with spot closing of 317.90. The numbers of contracts traded were 35,147 (Provisional).

ICICI Bank January 2020 futures traded at a premium of 3.10 points at 527.25 (LTP) compared with spot closing of 524.15. The numbers of contracts traded were 26,343 (Provisional).

Indiabulls Housing Finance January 2020 futures traded at a discount of 1.55 points at 306.45 (LTP) compared with spot closing of 308.00. The numbers of contracts traded were 24,199 (Provisional).

Reliance Industries January 2020 futures traded at a premium of 7.80 points at 1534.75 (LTP) compared with spot closing of 1526.95. The numbers of contracts traded were 22,481 (Provisional).

HDFC Bank January 2020 futures traded at a premium of 4.00 points at 1265.00 (LTP) compared with spot closing of 1261.00. The numbers of contracts traded were 20,562 (Provisional).

Among, Nifty calls, 12200 SP from the January month expiry was the most active call with a contraction of 0.005 million open interests. Among Nifty puts, 12000 from the January month expiry was the most active put with an addition of 0.40 units open interests. The maximum OI outstanding for Calls was at 12500 SP (2.75 mn) and that for Puts was at 12000 SP (4.23 mn). The respective Support and Resistance levels of Nifty are: Resistance 12,134.95 -- Pivot Point 12,070.15 -- Support -- 11,988.15.

The Nifty Put Call Ratio (PCR) finally stood at 1.24 for January month contract. The top five scrips with highest PCR on Indian Oil Corporation (1.19), Shree Cement (1.11), Bajaj Finance (1.09), Just Dial (1.03) and Tata Consultancy Services (1.02).

Among most active underlying, State Bank of India witnessed an addition of 7.27 million units of Open Interest in the January month futures contract, followed by Reliance Industries witnessing an addition of 0.42 million units of Open Interest in the January month contract, Bajaj Finance witnessed an addition of 0.20 million units of Open Interest in the January month contract, ICICI Bank witnessed an addition of 5.14 million units of Open Interest in the January month contract and HDFC Bank witnessed an addition of 1.43 million units of Open Interest in the January month future contract (Provisional).