Key equity benchmark --Nifty-- ended the choppy day on lower note with losses of 0.37% on Thursday. Market made a cautious start with the Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that the coronavirus outbreak will have a limited impact on India but the global GDP and trade will definitely get affected due to the large size of the Chinese economy. He added that only a couple of sectors in India are likely to see some disruptions but alternatives are being explored to overcome those issues. Despite volatility, index managed to trade in green terrain during noon deals, as sentiments turned optimistic with report that the Cabinet Committee on Economic Affairs (CCEA) approved a new central sector scheme ‘Formation and Promotion of Farmer Produce Organizations (FPOs)’ to form and promote 10,000 new FPOs in five years period from 2019-20 to 2023-24 with budgetary support of Rs 4,496 crore as part of its efforts to cut production cost and boost income of farming community.
However, the local market witnessed a sharp sell-off in the last leg of the trade, as sentiments got hit with credit rating agency, Fitch Ratings’ report stating that with deceleration in growth and tight liquidity conditions, the country's financial institution sector may continue to face challenging operating environment. Market participants paid no heed towards a report stating that mutual funds focused on investing in fixed-income securities saw an inflow of over Rs 94,000 crore in three months ended December 2019, driven by infusion in liquid and overnight funds.
Traders were seen piling up positions in Bank, Auto and Metal, while selling was witnessed in Financial services, FMCG and IT. The top gainers from the F&O segment Indiabulls Housing Finance, Max Financial Services and Apollo Tyres. On the other hand, the top losers were Cipla, Asian Paints and Hindustan Unilever. 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 2.30% and reached 13.70. The 50 share Nifty down by 45.05 points or 0.37% to settle at 12,080.85.
Nifty February 2020 futures closed at 12081.20 (LTP) on Thursday, at a premium of 0.35 points over spot closing of 12080.85, while Nifty March 2020 futures ended at 12093.80 (LTP), at a premium of 12.95 points over spot closing. Nifty February futures saw an addition of 0.69 million (mn) units, taking the total outstanding open interest (OI) to 12.48 mn units. The near month derivatives contract will expire on February 27, 2020 (Provisional).
From the most active contracts, Indiabulls Housing Finance February 2020 futures traded at a premium of 1.40 points at 337.40 (LTP) compared with spot closing of 336.00. The numbers of contracts traded were 64,647 (Provisional).
Indusind Bank February 2020 futures traded at a premium of 1.05 points at 1182.00 (LTP) compared with spot closing of 1180.95. The numbers of contracts traded were 39,165 (Provisional).
State Bank of India February 2020 futures traded at a premium of 0.05 points at 327.95 (LTP) compared with spot closing of 327.90. The numbers of contracts traded were 33,342 (Provisional).
Max Financial Services February 2020 futures traded at a premium of 1.30 points at 564.65 (LTP) compared with spot closing of 563.35. The numbers of contracts traded were 26,709 (Provisional).
Escorts February 2020 futures traded at a premium of 3.55 points at 882.55 (LTP) compared with spot closing of 879.00. The numbers of contracts traded were 22,288 (Provisional).
Among, Nifty calls, 12200 SP from the February month expiry was the most active call with an addition of 1.33 million open interests. Among Nifty puts, 12100 SP from the February month expiry was the most active put with an addition of 0.001 million open interests. The maximum OI outstanding for Calls was at 12200 SP (3.45 mn) and that for Puts was at 12000 SP (4.00 mn). The respective Support and Resistance levels of Nifty are: Resistance 12 131.42 -- Pivot Point 12 101.43 -- Support -- 12 050.87
The Nifty Put Call Ratio (PCR) finally stood at 1.02 for February month contract. The top five scrips with highest PCR on Shriram Transport Finance Company (1.51) Aurobindo Pharma (1.19) Power Finance Corporation (1.18) Tata Chemicals (1.16) and Tata Consultancy Services (1.16).
Among most active underlying, State Bank Of India witnessed a contraction of 7.27 million units of Open Interest in the February month futures contract, followed by Indiabulls Housing Finance witnessing an addition of 0.76 million units of Open Interest in the February month contract, Reliance Industries witnessed a contraction of 1.52 million units of Open Interest in the February month contract, Muthoot Finance witnessed an addition of 0.15 million units of Open Interest in the February month contract and Indusind Bank witnessed a contraction of 2.10 million units of Open Interest in the February month future contract (Provisional).
