Nifty bounces back after 2-day continues downfall

After previous two session’s downfall, NSE gauge -- Nifty50 -- bounced back and closed the optimistic day of trade with a gain of over half a percent. After getting positive start, market showed strength during the entire trading session, as sentiment got a boost with the report that government is expected to raise spending on infrastructure and cut some personal tax in its 2020-2021 budget, to spur consumer demand and investment. The market mood remained firm with NITI Aayog CEO Amitabh Kant’s statement that the goal of India becoming a $5 trillion economy is achievable even as it’s a tough task. However, the states would have to play a critical role for the national economy to meet the challenging target.

Further, index extended initial gains and touched its intraday high point, as traders took support with report that India and the US are likely to finalise a trade deal pegged above $10 billion (over Rs 71,200 crore) in February. The report also adds that the issue of medical devices-a bone of contention between the two sides-has been resolved. However, in last leg of trade market come off from its intraday high point, as traders failed to get relief with the commerce ministry statement that India has pitched for elimination of trade-distorting subsidies on agriculture and ensuring differential treatment to developing countries by the WTO members.

Most of the NSE sectoral indices ended in green, except Pharma. The top gainers from the F&O segment Tata Motors, Bajaj Finance and Tata Motors – DVR. On the other hand, the top losers were Ramco Cements, Eicher Motors and NIIT Technologies. 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 decreased by 4.62% and reached 16.49. The 50 share Nifty was up by 73.70 points or 0.61% to settle at 12,129.50.

Nifty January 2020 futures closed at 12121.00 (LTP) on Wednesday, at a discount of 8.50 points over spot closing of 12129.50, while Nifty February 2020 futures ended at 12157.00 (LTP), at a premium of 27.50 points over spot closing. Nifty January futures saw an addition of 0.65 million (mn) units, taking the total outstanding open interest (OI) to 11.55 mn units. The near month derivatives contract will expire on January 30, 2020 (Provisional).

From the most active contracts, Reliance Industries January 2020 futures traded at a discount of 0.10 points at 1479.90 (LTP) compared with spot closing of 1480.00. The numbers of contracts traded were 40,384 (Provisional).

Bajaj Finance January 2020 futures traded at a premium of 5.30 points at 4431.50 (LTP) compared with spot closing of 4426.20. The numbers of contracts traded were 40,371 (Provisional).

ICICI Bank January 2020 futures traded at a premium of 0.95 points at 527.85 (LTP) compared with spot closing of 526.90. The numbers of contracts traded were 37,758 (Provisional).

Housing Development Finance Corporation January 2020 futures traded at a discount of 1.85 points at 2404.45 (LTP) compared with spot closing of 2406.30. The numbers of contracts traded were 35,133 (Provisional).

Tata Consultancy Services January 2020 futures traded at a discount of 0.70 points at 2153.30 (LTP) compared with spot closing of 2154.00. The numbers of contracts traded were 25,353 (Provisional).

Among, Nifty calls, 12200 SP from the January month expiry was the most active call with a contraction of 0.34 million open interests. Among Nifty puts, 12100 from the January month expiry was the most active put with an addition of 0.88 units open interests. The maximum OI outstanding for Calls was at 12200 SP (5.28 mn) and that for Puts was at 12000 SP (3.55 mn). The respective Support and Resistance levels of Nifty are: Resistance 12,164.80 -- Pivot Point 12,134.30 -- Support --12,099.00.

The Nifty Put Call Ratio (PCR) finally stood at 0.90 for January month contract. The top five scrips with highest PCR on Tata Chemicals (1.68), Mahanagar Gas (1.43), Indraprastha Gas (1.41), ICICI Prudential Life Insurance Comp (1.25) and Berger Paints India (1.21)

Among most active underlying, Bajaj Finance witnessed an addition of 0.70 million units of Open Interest in the January month futures contract, followed by Reliance Industries witnessing an addition of 5.81 million units of Open Interest in the January month contract, State Bank Of India witnessed an addition of 12.33 million units of Open Interest in the January month contract, ICICI Bank witnessed an addition of 22.23 million units of Open Interest in the January month contract and Maruti Suzuki India witnessed an addition of 0.34 million units of Open Interest in the January month future contract (Provisional).