Nifty ends at record closing high

Indian local benchmark -- Nifty -- closed the range bound day of trade at record closing highs on Monday with gain 73 points. Market made a positive start, as sentiment got a boost as country's foreign exchange reserves touched a record high of $461.157 billion, after it surged by $3.689 billion in the week to January 3. Market maintained its gaining momentum, as traders were taking support with Union minister for micro, small and medium enterprises (MSMEs) Nitin Gadkari’s statement that the Centre is formulating a scheme to encourage import substitute products in the manufacturing sector in order to save foreign exchange.

However, market trimmed some of its initial gains in late afternoon session, as some cautiousness came with NITI Aayog CEO Amitabh Kant’s statement that the service sector is the largest component of India’s GDP but the country cannot achieve an ambitious goal of $5 trillion economy without the active participation of the manufacturing sector. However, in the last leg of the trade, Nifty finished the session at new closing high of 12,329 mark, as traders took relief with the report that rebound in manufacturing activity pulled up November’s overall industrial output, helping it to grow 1.8% after declining for three consecutive months. Output had declined by 3.8% in October after a 4.3% contraction in September, the steepest fall in eight years.

All of the NSE sectoral indices ended in green. The top gainers from the F&O segment Infosys, L&T Finance Holdings and IndusInd Bank. On the other hand, the top losers were Yes Bank, Page Industries and Dish TV 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 1.40% and reached 14.27. The 50 share Nifty was up by 72.75 points or 0.59% to settle at 12,329.55.

Nifty January 2020 futures closed at 12362.00 (LTP) on Monday, at a premium of 32.45 points over spot closing of 12329.55, while Nifty February 2020 futures ended at 12400.05(LTP), at a premium of 70.50 points over spot closing. Nifty December futures saw an addition of 0.30 million (mn) units, taking the total outstanding open interest (OI) to 13.58 mn units. The near month derivatives contract will expire on January 30, 2020 (Provisional).

From the most active contracts, Infosys January 2020 futures traded at a premium of 1.60 points at 774.10 (LTP) compared with spot closing of 772.50. The numbers of contracts traded were 40,741 (Provisional).

IndusInd Bank January 2020 futures traded at a premium of 7.00 points at 1553.00 (LTP) compared with spot closing of 1546.00. The numbers of contracts traded were 20,990 (Provisional).

State Bank of India January 2020 futures traded at a premium of 1.40 points at 332.00 (LTP) compared with spot closing of 330.60. The numbers of contracts traded were 19,976 (Provisional).

HDFC Bank January 2020 futures traded at a premium of 1.00 points at 1288.00 (LTP) compared with spot closing of 1287.00. The numbers of contracts traded were 17,059 (Provisional).

Reliance Industries January 2020 futures traded at a premium of 6.85 points at 1546.70 (LTP) compared with spot closing of 1539.85. The numbers of contracts traded were 16,958 (Provisional).

Among, Nifty calls, 12500 SP from the January month expiry was the most active call with an addition of 0.88 million open interests. Among Nifty puts, 12300 from the January month expiry was the most active put with an addition of 0.41 units open interests. The maximum OI outstanding for Calls was at 12500 SP (2.70 mn) and that for Puts was at 12000 SP (4.59 mn). The respective Support and Resistance levels of Nifty are: Resistance 12,349.60 -- Pivot Point 12,317.70 -- Support -- 12,297.65.

The Nifty Put Call Ratio (PCR) finally stood at 1.45 for January month contract. The top five scrips with highest PCR on UltraTech Cement (1.19), Power Finance Corporation (1.18), Escorts (1.12), Shree Cement (1.10) and Indian Oil Corporation (1.10).

Among most active underlying, Infosys witnessed an addition of 2.54 million units of Open Interest in the January month futures contract, followed by State Bank of India witnessing an addition of 4.15 million units of Open Interest in the January month contract, Reliance Industries witnessed an addition of 0.47 million units of Open Interest in the January month contract, IndusInd Bank witnessed an addition of 0.59 million units of Open Interest in the January month contract and Tata Motors witnessed an addition of 3.50 million units of Open Interest in the January month future contract (Provisional).