Nifty continues south-bound journey for second consecutive day

Nifty continued its south-bound journey for the second consecutive day and snapped the session below its crucial 12050 mark on Tuesday. Market made a positive start, as traders were taking support with private report indicating that Finance Minister Nirmala Sitharaman's first full year Budget is expected to provide short-term stimulants to boost consumer demand, and such measures will get a positive response from markets. Afterwards, key index started trading choppy, as traders were concerned with Nobel laureate and economist Abhijit Banerjee’s statement that the country could be passing through a phase of recession, and there is ‘nothing in the data’ that suggests otherwise. He added that the priority of the government should be on refinancing the banking sector, which is in ‘doldrums’. However, due to heavy sell off in the last leg of trade, dragged the index to touch its intraday low point as investors got wary about the global economic impact of the fast-spreading Wuhan coronavirus.

Most of the NSE sectoral indices ended in red, except IT, Financial services and Realty. The top gainers from the F&O segment United Spirits, Dish TV India and Mahanagar Gas. On the other hand, the top losers were Vodafone Idea, Torrent Pharmaceuticals and Vedanta. In the index option segment, maximum OI continues to be seen in the 12000 -12,400 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 0.71% and reached 17.29. The 50 share Nifty was down by 63.20 points or 0.52% to settle at 12,055.80.

Nifty January 2020 futures closed at 12075.00 (LTP) on Tuesday, at a premium of 19.20 points over spot closing of 12055.80, while Nifty February 2020 futures ended at 12114.90 (LTP), at a premium of 59.10 points over spot closing. Nifty January futures saw an addition of 0.57 million (mn) units, taking the total outstanding open interest (OI) to 12.94 mn units. The near month derivatives contract will expire on January 30, 2020 (Provisional).

From the most active contracts, Housing Development Finance Corporation January 2020 futures traded at a premium of 3.10 points at 2436.50 (LTP) compared with spot closing of 2433.40. The numbers of contracts traded were 50,836 (Provisional).

ICICI Bank January 2020 futures traded at a premium of 0.30 points at 528.30 (LTP) compared with spot closing of 528.00. The numbers of contracts traded were 43,993 (Provisional).

Reliance Industries January 2020 futures traded at a premium of 1.95 points at 1475.45 (LTP) compared with spot closing of 1473.50. The numbers of contracts traded were 38,585 (Provisional).

HDFC Bank January 2020 futures traded at a premium of 2.45 points at 1225.55 (LTP) compared with spot closing of 1223.10. The numbers of contracts traded were 35,283 (Provisional).

Maruti Suzuki India January 2020 futures traded at a premium of 8.70 points at 7007.70 (LTP) compared with spot closing of 6999.00. The numbers of contracts traded were 33,989 (Provisional).

Among, Nifty calls, 12200 SP from the January month expiry was the most active call with an addition of 0.63 million open interests. Among Nifty puts, 12100 from the January month expiry was the most active put with a contraction of 0.25 million open interests. The maximum OI outstanding for Calls was at 12200 SP (6.15 mn) and that for Puts was at 12000 SP (4.04 mn). The respective Support and Resistance levels of Nifty are: Resistance 12,138.07 -- Pivot Point 12,081.28 --Support --11,999.02.

The Nifty Put Call Ratio (PCR) finally stood at 0.77 for January month contract. The top five scrips with highest PCR on Tata Chemicals (1.32), Mahanagar Gas (1.29), Indraprastha Gas (1.27), Escorts (1.18) and Mahindra & Mahindra Fin. Services (1.15).

Among most active underlying, Reliance Industries 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 6.77 million units of Open Interest in the January month contract, Maruti Suzuki India witnessed an addition of 0.24 million units of Open Interest in the January month contract, Housing Development Finance Corporation witnessed an addition of 3.53 million units of Open Interest in the January month contract and ICICI Bank witnessed an addition of 1.07 million units of Open Interest in the January month future contract (Provisional).