Nifty extends gain for second consecutive day

The local benchmark, Nifty extended its gain for second consecutive day on Friday and finished the day’s trade with gain of 0.33%. Market made positive start, as relief rally following a de-escalation in tensions between the US and Iran. Traders remained positive with Prime Minister Narendra Modi’s statement that fundamentals of the Indian economy are strong and it has the capacity to bounce back. Further, Nifty moved towards day’s high points in the afternoon session, as traders took encouragement with the report that the Commerce and Industry Ministry has examined revamping of the Special Economic Zone (SEZ) policy to meet the global challenges being faced by Indian exporters. It has also discussed ways for implementation of the remaining recommendations of Baba Kalyani report on SEZ to facilitate ease of doing business in the present global market scenario.

Afterwards, market switched its direction and started declining to touch intraday low point in late afternoon session, as some mild weakness came with American economist Nouriel Roubini’s report that Indian government has chosen to focus on ideological considerations rather than economic slowdown. The professor of economics at New York University’s Stern School of Business also warned that there can be a loss of popularity if the economy goes down. Finally, nifty managed to end the day’s trade in green terrain.  

Most of the NSE sectoral indices ended in green, except PVT Bank. The top gainers from the F&O segment Sun TV Network, Century Textiles & Industries and Tata Global Beverages. On the other hand, the top losers were Yes Bank, Zee Entertainment Enterprises and Indiabulls Housing Finance. 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 0.57% and reached 14.07. The 50 share Nifty was up by 40.90 points or 0.33% to settle at 12,256.80.

Nifty January 2020 futures closed at 12293.50 (LTP) on Friday, at a premium of 36.70 points over spot closing of 12256.80, while Nifty February 2020 futures ended at 12336.00 (LTP), at a premium of 79.20 points over spot closing. Nifty December futures saw an addition of 0.66 million (mn) units, taking the total outstanding open interest (OI) to 13.82 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 0.40 points at 332.85 (LTP) compared with spot closing of 332.45. The numbers of contracts traded were 37,326 (Provisional).

Bharti Airtel January 2020 futures traded flat at 457.75 (LTP) compared with spot closing of 457.75. The numbers of contracts traded were 30,510 (Provisional).

Tata Motors January 2020 futures traded at a premium of 1.00 points at 195.25 (LTP) compared with spot closing of 194.25. The numbers of contracts traded were 21,432 (Provisional).

Indiabulls Housing Finance January 2020 futures traded at a discount of 1.25 points at 312.55 (LTP) compared with spot closing of 313.80. The numbers of contracts traded were 20,829 (Provisional).

Tata Steel January 2020 futures traded at a premium of 1.65 points at 489.00 (LTP) compared with spot closing of 487.35. The numbers of contracts traded were 18,974 (Provisional).

Among, Nifty calls, 12500 SP from the January month expiry was the most active call with an addition of 0.12 million open interests. Among Nifty puts, 12000 from the January month expiry was the most active put with an addition of 0.24 units open interests. The maximum OI outstanding for Calls was at 12500 SP (2.64 mn) and that for Puts was at 12000 SP (4.65 mn). The respective Support and Resistance levels of Nifty are: Resistance 12,307.60 -- Pivot Point 12,260.40 -- Support --12,209.60.

The Nifty Put Call Ratio (PCR) finally stood at 1.42 for January month contract. The top five scrips with highest PCR on UltraTech Cement (1.12), Just Dial (1.11), Bajaj Finance (1.10), Escorts (1.02) and Indian Oil Corporation (1.01).

Among most active underlying, State Bank of India witnessed an addition of 3.34 million units of Open Interest in the January month futures contract, followed by Infosys witnessing an addition of 1.42 million units of Open Interest in the January month contract, Tata Motors witnessed an addition of 5.04 million units of Open Interest in the January month contract, Reliance Industries witnessed an addition of 0.10 million units of Open Interest in the January month contract and Bharti Airtel witnessed an addition of 23.67 million units of Open Interest in the January month future contract (Provisional).