Nifty ends volatile trade in positive territory

The local benchmark --Nifty-- ended a highly volatile trading session in positive note with gain of of one third percent. Market made cautious start, as sentiments remained down-beat with Moody's statement that India's nominal growth projection and fiscal deficit target for 2020-21 will be challenging to achieve. It added that the 10% nominal growth expectation that's in the 2021 budget is going to be challenging to achieve and as a result that would present some fiscal challenges as well. However, market bounced back from its losses and started moving up with reports that the government has provided higher budget allocation for agriculture, and its allied activities as well as to the food and food processing sector for 2020-21. For the agriculture and farmers welfare ministry, the government has provided 30 per cent increase in the fund allocation at Rs 1,42,761.58 crore for the next fiscal as against the revised estimate of Rs 1,09,750.17 crore for the ongoing financial year.

Further, index turned volatile, as traders were concerned with the Consumer Electronics and Appliances Manufacturers Association’s (CEAMA) statement that prices of consumer goods like refrigerators, ACs, coolers and washing machines may rise in the short-term after the government's proposal to increase basic customs duty on components like compressors and motors. However, traders found some solace with monthly survey that the country's manufacturing sector activity climbed to a near eight-year high in January, driven by sharp rise in new business orders amid a rebound in demand conditions that led to rise in production and hiring activity. Finally, Nifty ended the day’s trade above a crucial psychological level of 11700 mark.

Most of the NSE sectoral indices ended in green, except IT, Pharma and PSU Bank. The top gainers from the F&O segment Escorts, Max Financial Services and Asian Paints. On the other hand, the top losers were Indiabulls Housing Finance, Piramal Enterprises and Just Dial. In the index option segment, maximum OI continues to be seen in the 12000 -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 decreased by 6.25% and reached 15.78. The 50 share Nifty was up by 46.05 points or 0.39% to settle at 11,707.90.

Nifty February 2020 futures closed at 11710.15 (LTP) on Monday, at a premium of 2.25 points over spot closing of 11707.90, while Nifty March 2020 futures ended at 11750.85(LTP), at a premium of 42.95 points over spot closing. Nifty February futures saw an addition of 1.40 million (mn) units, taking the total outstanding open interest (OI) to 15.39 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 0.40 points at 298.90 (LTP) compared with spot closing of 298.50. The numbers of contracts traded were 38,360 (Provisional).

Reliance Industries February 2020 futures traded at a premium of 1.90 points at 1387.90 (LTP) compared with spot closing of 1386.00. The numbers of contracts traded were 37,645 (Provisional).

ITC February 2020 futures traded at a premium of 0.45 points at 209.35 (LTP) compared with spot closing of 208.90. The numbers of contracts traded were 32,008 (Provisional).

Indiabulls Housing Finance February 2020 futures traded at a discount of 11.05 points at 244.85 (LTP) compared with spot closing of 255.90. The numbers of contracts traded were 30,696 (Provisional).

ICICI Bank February 2020 futures traded at a premium of 1.15 points at 517.65 (LTP) compared with spot closing of 516.50. The numbers of contracts traded were 24,699 (Provisional).

Among, Nifty calls, 12000 SP from the February month expiry was the most active call with a contraction of 0.009 million open interests. Among Nifty puts, 11700 from the February month expiry was the most active put with an addition of 0.38 million open interests. The maximum OI outstanding for Calls was at 12500 SP (2.07 mn) and that for Puts was at 12000 SP (2.53 mn). The respective Support and Resistance levels of Nifty are: Resistance 11,767.00 -- Pivot Point 11,690.75 -- Support --11,631.65.

The Nifty Put Call Ratio (PCR) finally stood at 1.01 for February month contract. The top five scrips with highest PCR on Tata Chemicals (1.41), Tata Consultancy Services (1.15), Punjab National Bank (1.05), Jubilant FoodWorks (1.01) and Hindustan Unilever (1.00).

Among most active underlying, State Bank of India witnessed an addition of 4.60 million units of Open Interest in the February month futures contract, followed by Reliance Industries witnessing an addition of 2.02 million units of Open Interest in the February month contract, ITC witnessed an addition of 8.60 million units of Open Interest in the February month contract, ICICI Bank witnessed an addition of 3.28 million units of Open Interest in the February month contract and Tata Motors witnessed an addition of 2.35 million units of Open Interest in the February month future contract (Provisional).