The local benchmark, Nifty extended southward journey for third straight session as benchmark witness selling pressure to end up the session with the cut of more than half a percent. Earlier, the index opened in the green terrain, as traders took encouragement with Finance Minister Nirmala Sitharaman’s statement that if required, the government would take more steps beyond the announcements made in the Union Budget 2020-21 to boost economic activities. But, soon market turned volatile, as traders were concerned with the report that the country's exports contracted for the sixth month in a row by 1.66% in January to $25.97 billion. Imports too declined by 0.75% $41.14 billion, leaving a trade deficit of $15.17 billion during the month under review. Further, the index failed to hold its gains and started trading tad below near neutral lines, as moody's Investors Service slashed India's growth forecast to 5.4 percent for 2020 from 6.6 percent projected earlier on slower than expected economic recovery. In its update on Global Macro Outlook, Moody's said India's economy has decelerated rapidly over the last two years and expects economic recovery to begin in the current quarter.
Afterwards, nifty extended its downtrend, as traders remained anxious with report that the investors poured nearly Rs 12,000 crore into equity oriented mutual funds in the three months ended December 2019, a sharp slump of 50% from the preceding quarter, on worries over stock valuations as well as stuttering economic growth. Sharp selling in last leg of trade dragged the market to its intraday lows, as market participants failed to take any sense of relief with Reserve Bank Governor Shaktikanta Das’ statement that momentum is gathering pace on credit growth and expressed hope that transmission of rate cuts will improve further in the coming days. His comments come against the backdrop of concerns over growth of the economy, which has also registered spike in inflation and slowdown in industrial production.
Most of the NSE sectoral indices ended in red, except IT. The top gainers from the F&O segment Muthoot Finance, Balkrishna Industries and Manappuram Finance. On the other hand, the top losers were NCC, LIC Housing Finance and Glenmark Pharmaceuticals. 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 5.88% and reached 14.41. The 50 share Nifty down by 67.65 points or 0.56% to settle at 12,045.80.
Nifty February 2020 futures closed at 12079.20 (LTP) on Monday, at a premium of 33.40 points over spot closing of 12045.80, while Nifty March 2020 futures ended at 12095.00 (LTP), at a premium of 49.20 points over spot closing. Nifty February futures saw an addition of 0.45 million (mn) units, taking the total outstanding open interest (OI) to 13.12 mn units. The near month derivatives contract will expire on February 27, 2020 (Provisional).
From the most active contracts, LIC Housing Finance February 2020 futures traded at a premium of 1.50 points at 382.00 (LTP) compared with spot closing of 380.50. The numbers of contracts traded were 35,800 (Provisional).
Indusind Bank February 2020 futures traded at a premium of 5.05 points at 1178.70 (LTP) compared with spot closing of 1173.65. The numbers of contracts traded were 30,469 (Provisional).
State Bank of India February 2020 futures traded at a premium of 1.20 points at 315.90 (LTP) compared with spot closing of 314.70. The numbers of contracts traded were 26,975 (Provisional).
Muthoot Finance February 2020 futures traded at a premium of 0.50 points at 880.00 (LTP) compared with spot closing of 879.50. The numbers of contracts traded were 24,358 (Provisional).
Reliance Industries February 2020 futures traded at a premium of 3.85 points at 1482.35 (LTP) compared with spot closing of 1478.50. The numbers of contracts traded were 21,539 (Provisional).
Among, Nifty calls, 12200 SP from the February month expiry was the most active call with an addition of 0.29 million open interests. Among Nifty puts, 12000 from the February month expiry was the most active put with a contraction of 0.27 million open interests. The maximum OI outstanding for Calls was at 12500 SP (2.63 mn) and that for Puts was at 12000 SP (3.42 mn). The respective Support and Resistance levels of Nifty are: Resistance 12,124.60 -- Pivot Point 12,080.80 -- Support -- 12,002.00.
The Nifty Put Call Ratio (PCR) finally stood at 1.13 for February month contract. The top five scrips with highest PCR on Tata Consultancy Services (1.61), Shriram Transport Finance Company (1.31), JSW Steel (1.26), Bajaj Finance (1.22), and SRF (1.12).
Among most active underlying, State Bank Of India witnessed a contraction of 0.96 million units of Open Interest in the February month futures contract, followed by Muthoot Finance witnessing an addition of 1.39 million units of Open Interest in the February month contract, Reliance Industries witnessed an addition of 0.31 million units of Open Interest in the February month contract, Bharti Airtel witnessed a contraction of 0.70 million units of Open Interest in the February month contract and Lic Housing Finance witnessed an addition of 1.83 million units of Open Interest in the February month future contract (Provisional).
