Nifty snaps four days winning streak; ends below 12,350 mark

The local benchmark--Nifty-- snapped the four days winning streak to close in red territory, breaching its crucial 12350 mark on Wednesday. Markets made a sluggish start with a private report stating that a spike in India's retail inflation in December has raised the chances that the Reserve Bank of India (RBI) will put rate cuts on hold for some time despite economic growth languishing at more than six-year lows. As per the report, the RBI's monetary policy committee (MPC) may even change its stance from accommodative to neutral at its February meeting. Soon market touched intraday low as the bilateral trade between India and China declined by about $3 billion last year while India's trade deficit continues to be high amounting to $56.77 billion as both countries experienced an economic slowdown. However, in the last leg of the trade, the Nifty managed to trim its losses, as traders found some solace with report that new FICCI President Sangita Reddy has urged the government not to worry too much about the fiscal deficit and try to pump the economy by increasing investments to arrest slowdown and accelerate growth.

Most of the NSE sectoral indices ended in green, except Bank, Financial services and PVT Bank. The top gainers from the F&O segment Mahanagar Gas, Piramal Enterprises and Indraprastha Gas. On the other hand, the top losers were IndusInd Bank, Wipro and Shriram Transport Finance Company. 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 1.49% and reached 14.12. The 50 share Nifty was down by 19.00 points or 0.15% to settle at 12,343.30.

Nifty January 2020 futures closed at 12374.50 (LTP) on Wednesday, at a premium of 31.20 points over spot closing of 12343.30, while Nifty February 2020 futures ended at 12414.95 (LTP), at a premium of 71.65 points over spot closing.Nifty December futures saw an addition of 0.06 million (mn) units, taking the total outstanding open interest (OI) to 13.62 mn units. The near month derivatives contract will expire on January 30, 2020 (Provisional).

From the most active contracts, IndusInd Bank January 2020 futures traded at a premium of 7.00 points at 1406.00 (LTP) compared with spot closing of 1399.00. The numbers of contracts traded were 45,470 (Provisional).

Yes Bank January 2020 futures traded at a discount of 3.10 points at 36.80 (LTP) compared with spot closing of 39.90. The numbers of contracts traded were 26,641 (Provisional).

Indiabulls Housing Finance January 2020 futures traded at a premium of 0.05 points at 311.00 (LTP) compared with spot closing of 310.95. The numbers of contracts traded were 21,096 (Provisional).

State Bank of India January 2020 futures traded at a premium of 1.70 points at 325.70 (LTP) compared with spot closing of 324.00. The numbers of contracts traded were 20,987 (Provisional).

Piramal Enterprises January 2020 futures traded at a premium of 9.50 points at 1546.90 (LTP) compared with spot closing of 1537.40. The numbers of contracts traded were 17,170 (Provisional).

Among, Nifty calls, 12500 SP from the January month expiry was the most active call with an addition of 0.11 million open interests. Among Nifty puts, 12300 from the January month expiry was the most active put with an addition of 0.003 units open interests. The maximum OI outstanding for Calls was at 12500 SP (2.79 mn) and that for Puts was at 12000 SP (4.21 mn). The respective Support and Resistance levels of Nifty are: Resistance 12,372.72 -- Pivot Point 12,325.73 -- Support -- 12,296.32 .

The Nifty Put Call Ratio (PCR) finally stood at 1.44 for January month contract. The top five scrips with highest PCR on Escorts (1.31), Shree Cement (1.29), Balkrishna Industries (1.21), UltraTech Cement (1.20) and Tata Global Beverages (1.17).

Among most active underlying, IndusInd Bank witnessed an addition of 2.95 million units of Open Interest in the January month futures contract, followed by State Bank of India witnessing an addition of 7.62 million units of Open Interest in the January month contract, Reliance Industries witnessed an addition of 1.56 million units of Open Interest in the January month contract, Tata Global Beverages witnessed an addition of 1.31 million units of Open Interest in the January month contract and Tata Motors witnessed an addition of 2.46 million units of Open Interest in the January month future contract (Provisional).