Nifty extends winning streak for sixth day

S&P CNX Nifty extended its winning streak to the sixth consecutive session. After making positive start, market soon dragged into red zone, as India had reported six cases of new coronavirus variant. But the government said the existing vaccines for Covid-19 will protect against the new variants as there is no evidence to prove otherwise. Further market continued its weak trade, as Reserve Bank of India (RBI) in its report on Trend and Progress of Banking in India 2019-20 has said that going forward, the profitability of non-banking finance companies (NBFCs) may be dampened due to loan impairment, lower credit demand and a tendency to preserve cash. The RBI has also cautioned about the imminent stress in the banking sector after unwinding of the measures taken to combat the impact of COVID-19, and it said banks will need to adapt and adjust themselves to meet the upcoming challenges.

However, in late afternoon session, index erased all its losses and entered into positive territory to end the session in green zone, as Former RBI Governor Duvvuri Subbarao Rao’s statement that though Covid -19 and the subsequent lockdown left a trail of economic devastation on most countries, India can potentially build upon three positive aspects- push in the rural economy, stronger federalism and a huge consumption base. Buying in auto, metal and realty sector too provided strength to markets. Some comfort also came after government approved the 15th tranche of electoral bonds which will be open for sale between January 1 and January 10. Electoral bonds have been pitched as an alternative to cash donations made to political parties as part of efforts to bring transparency in political funding.

Most of the sectoral indices ended in green except Pharma, Bank and PSU Bank. The top gainers from the F&O segment were SAIL, Ramco Cement and Ultratech Cement. On the other hand, the top losers were PFC, REC and Adani Enterprises. In the index option segment, maximum OI continues to be seen in the 13500 - 14,700 calls and 12,900 - 13,500 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 1.53% and reached 21.11. The 50 share Nifty up by 49.35 points or 0.35% to settle at 13,981.95.

Nifty December 2020 futures closed at 13978.00 (LTP) on Wednesday, at a discount of 3.95 points over spot closing of 13981.95, while Nifty January 2021 futures ended at 14035.90(LTP), at a premium of 53.95 points over spot closing.  Nifty December futures saw an addition of 2,595 units, taking the total open interest (Contracts) to 1,12,722 units. The near month derivatives contract will expire on December 31, 2020 (Provisional).

From the most active contracts, HDFC Bank December 2020 futures traded at a premium of 3.55 points at 1435.60 (LTP) compared with spot closing of 1432.05. The numbers of contracts traded were 27,387(Provisional).

Reliance Industries December 2020 futures traded at a premium of 1.65 points at 1996.00 (LTP) compared with spot closing of 1994.35. The numbers of contracts traded were 26,398 (Provisional).

ICICI Bank December 2020 futures traded at a premium of 0.40 points at 528.00 (LTP) compared with spot closing of 527.60. The numbers of contracts traded were 20,175 (Provisional).

HDFC December 2020 futures traded at a discount of 2.30 points at 2519.40 (LTP) compared with spot closing of 2521.70. The numbers of contracts traded were 18,880 (Provisional).

Bajaj Finance December 2020 futures traded at a premium of 4.00 points at 5339.00 (LTP) compared with spot closing of 5335.00. The numbers of contracts traded were 17,521 (Provisional).

Among, Nifty calls, 14100 SP from the December month expiry was the most active call with an addition of 8,114 units open interests. Among Nifty puts, 13900 SP from the December month expiry was the most active put with an addition of 25,493 units open interests. The maximum OI outstanding for Calls was at 14100 SP (54,027 units) and that for Puts was at 13400 SP (75,634 units). The respective Support and Resistance levels of Nifty are: Resistance 14,030.98 -- Pivot Point 13,947.97 -- Support --13,898.93.

The Nifty Put Call Ratio (PCR) finally stood at (1.39) for December month contract. The top five scrips with highest PCR on Asian Paints (2.10), Bajaj Finance (1.30), SAIL (1.27), HDFC (1.22) and Ultratech Cement (1.21).

Among most active underlying, Reliance Industries witnessed an addition of 576 units of Open Interest in the December month futures contract followed by Bajaj Finance witnessed a contraction of 365 units of Open Interest in the December month futures contract, HDFC Bank witnessed a contraction of 5,378 units of Open Interest in the December month futures contract, ICICI Bank witnessed an addition of 4,892 units of Open Interest in the December month futures contract and HDFC witnessed an addition of 7,798 units of Open Interest in the December month futures contract (Provisional).