Nifty continues southward journey for fourth consecutive day

By erasing early gains, NSE gauge -- Nifty50 -- continued its southward journey for fourth consecutive day on Wednesday and ended the day’s trade below its crucial 12150 level. Market made a positive start, as traders took some support with Union Minister Piyush Goyal’s statement that India is working on ways to have fairer and more equitable terms in its trade relationships with various countries. However, market erased all of its gain to turn negative, as sentiments got hit with a private report that India may be witnessing the most glaring setback among emerging economies, but its double pain of slowing growth and surging inflation is spreading far and wide.

Market continued dull trade for remaining part of the day, as traders mood remained pessimistic with a report that direct tax collections till January 15 stood at Rs 7.3 lakh crore, down 5.2% from the year-ago period. Gross direct tax collections - after refunds but before devolution to states - for FY20 is budgeted to grow at 17.4% to Rs 13.35 lakh crore. In last leg of session, index added some more losses to end the session with the cut of more than half a percent, as traders remained concerned with India Ratings and Research, (Ind-Ra) report that it expects GDP to grow at 5.5 percent year-on-year in FY21 but added that downside risks persist. This is only a marginal improvement over the GDP growth of 5 percent estimated by the National Statistical Office for the FY20.

Most of the NSE sectoral indices ended in red, except FMGC, IT and Media. The top gainers from the F&O segment Zee Entertainment Enterprises, Just Dial and Dish TV India. On the other hand, the top losers were Vodafone Idea, Oil India and Oil & Natural Gas 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 increased by 3.14% and reached 16.36. The 50 share Nifty was down by 62.95 points or 0.52% to settle at 12,106.90.

Nifty January 2020 futures closed at 12149.00 (LTP) on Wednesday, at a premium of 42.10 points over spot closing of 12106.90, while Nifty February 2020 futures ended at 12187.65 (LTP), at a premium of 80.75 points over spot closing. Nifty January futures saw an addition of 1.24 million (mn) units, taking the total outstanding open interest (OI) to 14.26 mn units. The near month derivatives contract will expire on January 30, 2020 (Provisional).

From the most active contracts, Zee Entertainment Enterprises January 2020 futures traded at a premium of 1.20 points at 299.20 (LTP) compared with spot closing of 298.00. The numbers of contracts traded were 38,412 (Provisional).

Axis Bank January 2020 futures traded at a premium of 0.85 points at 710.15 (LTP) compared with spot closing of 709.30. The numbers of contracts traded were 25,669 (Provisional).

Indian Oil Corporation January 2020 futures traded at a premium of 0.15 points at 114.70 (LTP) compared with spot closing of 114.55. The numbers of contracts traded were 22,692 (Provisional).

Havells India January 2020 futures traded at a premium of 2.35 points at 602.05 (LTP) compared with spot closing of 599.70. The numbers of contracts traded were 21,703 (Provisional).

ICICI Bank January 2020 futures traded at a premium of 1.95 points at 523.95 (LTP) compared with spot closing of 522.00. The numbers of contracts traded were 21,164 (Provisional).

Among, Nifty calls, 12200 SP from the January month expiry was the most active call with an addition of 1.16 million open interests. Among Nifty puts, 12200 from the January month expiry was the most active put with a contraction of 0.001 units open interests. The maximum OI outstanding for Calls was at 12500 SP (3.48 mn) and that for Puts was at 12000 SP (3.55 mn). The respective Support and Resistance levels of Nifty are: Resistance 12,192.00 -- Pivot Point 12,139.95 -- Support -- 12,054.85.

The Nifty Put Call Ratio (PCR) finally stood at 1.03 for January month contract. The top five scrips with highest PCR on Zee Entertainment Enterprises (1.17), Balkrishna Industries (1.11), Escorts (1.11), DLF (1.11) and Bharti Airtel (1.08).

Among most active underlying, Axis Bank witnessed an addition of 2.85 million units of Open Interest in the January month futures contract, followed by Asian Paints witnessing an addition of 0.49 million units of Open Interest in the January month contract, Reliance Industries witnessed an addition of 0.35 million units of Open Interest in the January month contract, State Bank Of India witnessed an addition of 2.10 million units of Open Interest in the January month contract and Zee Entertainment Enterprises witnessed an addition of 4.20 million units of Open Interest in the January month future contract (Provisional).