Nifty breaks five day falling spree

Snapping its five days losing streak, key benchmark Nifty ended the day’s trade above its crucial 14,700 levels on Tuesday. Market made positive start, as the latest RBI policy minutes show that Governor Shaktikanta Das opined that growth momentum needs to be strengthened for a sustained revival of the economy and quick return to the pre-Covid trajectory while pitching for a status quo on rates. Further, market continued its trade in green zone with domestic rating agency Icra stating that the monthly collections, including overdues in its rated retail loan pools originated largely by NBFCs and HFCs, have reached pre-moratorium levels as of December 2020. However, it said for its rated microfinance players, collections are yet to reach the pre-moratorium levels. Traders overlooked investment through participatory notes (P-notes) in the Indian capital market dipped marginally to Rs 84,976 crore as on January 31 after hitting 31-month high value at the end of the preceding month. At December-end, the investment through such instruments had risen to a 31-month high of Rs 87,132 crore, reflecting the bullish stance of FPIs.

Market trimmed some its gains but managed to trade in positive territory till the end of the session, as India Ratings and Research has revised its outlook on the overall banking sector to stable for the fiscal 2021-2022 (FY22) from negative even as it sees higher stress emerging in the retail loan segment going ahead. For public sector banks (PSBs), the outlook has been revised to stable from negative and for private banks.

Traders were seen piling positions in Auto, FMGC and IT sector while selling was witnessed in Bank, Pharma and PSU Bank sector stocks. The top gainers from the F&O segment were Tata Steel, Tata Motors and SAIL. On the other hand, the top losers were Bank Baroda, Kotak Mahindra Bank and Dr Lal PathLabs. In the index option segment, maximum OI continues to be seen in the 14100 - 16200 calls and 13,700 - 14,700 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 0.95% and reached 25.23. The 50 share Nifty up by 32.10 points or 0.22% to settle at 14,707.80.

Nifty February 2021 futures closed at 14723.00  (LTP)on Tuesday, at a premium of 15.20 points over spot closing of 14707.80, while Nifty March 2021 futures ended at 14770.30 (LTP), at a premium of 62.50 points over spot closing.  Nifty February futures saw an addition of 9,790 units, taking the total open interest (Contracts) to 1,29,443 units. The near month derivatives contract will expire on February 25, 2021 (Provisional).

From the most active contracts, Reliance Industries February 2021 futures traded at a discount of 0.10 points at 2026.10 (LTP) compared with spot closing of 2026.20. The numbers of contracts traded were 55,140 (Provisional).

Tata Steel February 2021 futures traded at a premium of 1.40 points at 735.50 (LTP) compared with spot closing of 734.10. The numbers of contracts traded were 32,049 (Provisional).

ICICI Bank February 2021 futures traded at a premium of 0.05 points at 615.65 (LTP) compared with spot closing of 615.60. The numbers of contracts traded were 29,213 (Provisional).

Infosys February 2021 futures traded at a premium of 3.45 points at 1270.75 (LTP) compared with spot closing of 1267.30. The numbers of contracts traded were 25,114 (Provisional).

Kotak Mahindra Bank February 2021 futures traded at a premium of 5.20 points at 1879.00 (LTP) compared with spot closing of 1873.80. The numbers of contracts traded were 24,622 (Provisional).

Among, Nifty calls, 14800 SP from the February month expiry was the most active call with an addition of 24,192 units open interests. Among Nifty puts, 14700 SP from the February month expiry was the most active put with an addition of 25,471units open interests. The maximum OI outstanding for Calls was at 15000 SP (77,320 units) and that for Puts was at 14500 SP (51,769 units). The respective Support and Resistance levels of Nifty are: Resistance 14,824.25 -- Pivot Point 14,738.05 -- Support -- 14,621.60. 

The Nifty Put Call Ratio (PCR) finally stood at (0.83) for February month contract. The top five scrips with highest PCR on Vedanta (1.32), Jubilant FoodWorks (1.05), IDFC First Bank (1.04), Hindalco (1.03) and Shriram Transport Finance Company (1.00). 

Among most active underlying, Tata Motors witnessed a contraction of 10 units of Open Interest in the February month futures contract followed by Tata Steel witnessed a contraction of 177 units of Open Interest in the February month futures contract, SBIN witnessed an addition of 494 units of Open Interest in the February month futures contract, Reliance Industries witnessed an addition of 11,527 units of Open Interest in the February month futures contract and ICICI Bank witnessed an addition of 4,612 units of Open Interest in the February month futures contract (Provisional).