Nifty continues downfall for second consecutive day

The local benchmark, Nifty witnessed lackluster day of trade for yet another session on Friday losing its crucial 12000 level, ahead of an important event Budget 2020, which will be presented by Finance Minister Nirmala Sitharaman on February 1. Market made a positive start, as sentiment got a boost with the report the government is aiming at $80 billion of jewellery exports in the next five years from the present level of $40 billion. The Centre also expects the jewellery industry to generate additional employment of 2 million. However, market failed to hold its gaining momentum, as sentiments got hit with a report that the government’s efforts to drive ‘Make in India’ to success have not yet reflected in the country’s industrial output growth. India’s Index of Industrial Production (IIP) growth is expected to fall to 2 per cent in the current financial year 2019-20.

In the late afternoon, market managed to trim its losses to trade near neutral line, taking support with Economic Survey projected a GDP growth rate of 6-6.5 percent for the next fiscal (FY21). The survey also noted that the government is committed to supporting the micro, small and medium enterprises (MSME) sector, terming it an important segment of the economy that fosters entrepreneurship and generates employment opportunities at lower capital cost. However, market ended days trade near intraday low point, as weakness came with a private report stating that optimism level of mid-market Indian business leaders have seen a dip of 10 percentage points in the second half of 2019 as compared to the first half but have displayed cautious optimism while entering 2020.

Traders were seen piling up positions in Bank, Financial services and PSU Bank, while selling was witnessed in Auto, FMGC, and IT. The top gainers from the F&O segment were NIIT Technologies, Ujjivan Financial Services and Century Textiles & Industries. On the other hand, the top losers were Bharat Electronics, Marico and Oil India. In the index option segment, maximum OI continues to be seen in the 12200 -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 3.39% and reached 17.36. The 50 share Nifty was down by 73.70 points or 0.61% to settle at 11,962.10.

Nifty February 2020 futures closed at 11999.00 (LTP) on Friday, at a premium of 36.90 points over spot closing of 11962.10, while Nifty March 2020 futures ended at 12037.80 (LTP), at a premium of 75.70 points over spot closing. Nifty February futures saw an addition of 2.57 million (mn) units, taking the total outstanding open interest (OI) to 12.74 mn units. The near month derivatives contract will expire on February 27, 2020 (Provisional).

From the most active contracts, State Bank of India February 2020 futures traded at a premium of 1.40 points at 319.50 (LTP) compared with spot closing of 318.10. The numbers of contracts traded were 79,798 (Provisional).

Reliance Industries February 2020 futures traded at a premium of 7.00 points at 1417.00 (LTP) compared with spot closing of 1410.00. The numbers of contracts traded were 38,853 (Provisional).

NTPC February 2020 futures traded at a discount of 2.80 points at 110.05 (LTP) compared with spot closing of 112.85. The numbers of contracts traded were 34,713 (Provisional).

Kotak Mahindra Bank February 2020 futures traded at a premium of 1.30 points at 1689.95 (LTP) compared with spot closing of 1688.65. The numbers of contracts traded were 31,146 (Provisional).

Indusind Bank February 2020 futures traded at a premium of 4.00 points at 1259.00 (LTP) compared with spot closing of 1255.00. The numbers of contracts traded were 26,743 (Provisional).

Among, Nifty calls, 12500 SP from the February month expiry was the most active call with an addition of 0.31 million open interests. Among Nifty puts, 12000 from the February month expiry was the most active put with an addition of 0.29 units open interests. The maximum OI outstanding for Calls was at 12500 SP (1.82 mn) and that for Puts was at 12000 SP (2.84 mn). The respective Support and Resistance levels of Nifty are: Resistance 12,061.82 -- Pivot Point 12,003.83 -- Support -- 11,904.12.

The Nifty Put Call Ratio (PCR) finally stood at 1.02 for February month contract. The top five scrips with highest PCR on Page Industries (1.57), Tata Chemicals (1.49), ICICI Prudential Life Insurance Company (1.33), Tata Consultancy Services (1.31) and Hindustan Petroleum Corporation (1.29).

Among most active underlying, State Bank Of India witnessed an addition of 5.79 million units of Open Interest in the February month futures contract, followed by Reliance Industries witnessing an addition of 3.64 million units of Open Interest in the February month contract, Kotak Mahindra Bank witnessed an addition of 0.57 million units of Open Interest in the February month contract, Tata Motors witnessed an addition of 8.19 million units of Open Interest in the February month contract and ICICI Bank witnessed an addition of 2.48 million units of Open Interest in the February month future contract (Provisional).