Bears hold grip over market; Nifty plunges 0.55%

Nifty continued its pessimistic mood for second consecutive day and closed the session below its crucial 12050 mark on Monday. Market made a sluggish start and extended its losses throughout the day, as traders were concerned with Former Finance Minister P Chidambaram’s statement that the NDA government has not defined whether the $5 trillion dollars economy it aims to achieve is real GDP or nominal and claimed real GDP would not touch the figure at the current growth level by 2024 or 2025. Market extended its downside, as sentiments remain dampened with rating agency Icra’s statement that the GST compensation fund may see a shortfall of Rs 15,000-25,000 crore for 2019-20, and it pegged the unpaid GST compensation to the states at Rs 60,000-70,000 crore for the October 2019-January 2020 period.

Market remained in red zone with report that as many as 400 infrastructure projects, each worth Rs 150 crore or more, have been hit by total cost overruns of over Rs 4 lakh crore owing to delays and other reasons. However, the market managed to cut some losses in last hour of trade as some comfort came with Union Finance Minister Nirmala Sitharaman’s statement that the Centre, in the Budget 2020, has laid the foundation of increasing consumption while ensuring that the government's investment is deployed to build infrastructure leading to a $5 trillion economy by 2024-25.

All the NSE sectoral indices ended in red. The top gainers from the F&O segment UPL, MRF and Berger Paints. On the other hand, the top losers were Mahindra & Mahindra, Zee Entertainment 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 increased by 3.36% and reached 14.21. The 50 share Nifty down by 66.85 points or 0.55% to settle at 12,031.50.

Nifty February 2020 futures closed at 12048.95 (LTP) on Monday, at a premium of 17.45 points over spot closing of 12031.50, while Nifty March 2020 futures ended at 12072.00 (LTP), at a premium of 40.50 points over spot closing. Nifty February futures saw an addition of 0.74 million (mn) units, taking the total outstanding open interest (OI) to 14.52 mn units. The near month derivatives contract will expire on February 27, 2020 (Provisional).

From the most active contracts, Tata Steel February 2020 futures traded at a premium of 0.65 points at 443.80 (LTP) compared with spot closing of 443.15. The numbers of contracts traded were 27,456 (Provisional).

UPL February 2020 futures traded at a premium of 2.80 points at 571.80 (LTP) compared with spot closing of 569.00. The numbers of contracts traded were 22,658 (Provisional).

State Bank of India February 2020 futures traded at a premium of 1.05 points at 319.55 (LTP) compared with spot closing of 318.50. The numbers of contracts traded were 20,600 (Provisional).

Reliance Industries February 2020 futures traded at a premium of 1.30 points at 1443.50 (LTP) compared with spot closing of 1442.20. The numbers of contracts traded were 20,370 (Provisional).

Indiabulls Housing Finance February 2020 futures traded at a discount of 5.45 points at 318.00 (LTP) compared with spot closing of 323.45. The numbers of contracts traded were 19,764 (Provisional).

Among, Nifty calls, 12100 SP from the February month expiry was the most active call with an addition of 0.009 million open interests. Among Nifty puts, 12000 from the February month expiry was the most active put with an addition of 0.31 million open interests. The maximum OI outstanding for Calls was at 12500 SP (2.76 mn) and that for Puts was at 12000 SP (3.47 mn). The respective Support and Resistance levels of Nifty are: Resistance 12,093.12 -- Pivot Point 12,041.93 -- Support -- 11,980.32.

The Nifty Put Call Ratio (PCR) finally stood at 1.20 for February month contract. The top five scrips with highest PCR on Tata Chemicals (1.46), Bharat Forge (1.31), Power Finance Corporation (1.29), Shriram Transport Finance Company (1.14) and SRF (1.05).

Among most active underlying, State Bank Of India witnessed an addition of 2.69 million units of Open Interest in the February month futures contract, followed by Tata Steel witnessing an addition of 3.27 million units of Open Interest in the February month contract, Reliance Industries witnessed an addition of 0.35 million units of Open Interest in the February month contract, Bajaj Finance witnessed an addition of 0.23 million units of Open Interest in the February month contract and ICICI Bank witnessed an addition of 0.81 million units of Open Interest in the February month future contract (Provisional).