Nifty resumes southward journey on Friday

The local benchmark -- Nifty resumed southward journey on last trading day of week and ended the session with the cut of above a percent. Key index begun day on a somber note, as Former Reserve Bank of India Governor D Subbarao said the concern today was that the low interest rates and the enormous liquidity available in the system could potentially disrupt financial stability. He added that the challenge for central banks and for the Reserve Bank of India was to juggle between maintain price stability, supporting growth and employment, preserving financial stability and all this in a globalised world. Traders overlooked Finance minister Nirmala Sitharaman’s statement that India is the fastest growing economy despite the pandemic and asserted that the government managed the economy well.

Market added more losses, as Finance Minister Nirmala Sitharaman has said that the Indian economy suffered the biggest contraction due to the COVID-19 pandemic, but the government has been able to contain retail inflation at 6.2 percent. She said the Budget for the 2022-23 fiscal year, stands for continuity, brings stability to the economy along with predictability of taxation. She also said that the Indian economy suffered Rs 9.57 lakh crore loss due to the pandemic, compared to a loss of Rs 2.12 lakh crore during the global meltdown in 2008-09. Index continued its weak trade till end and finally, nifty closed the day’s trade below its 17400 level.

All the sectoral indices ended in red. The top gainers from the F&O segment were Aurobindo Pharma, IOC and Petronet LNG. On the other hand, the top losers were Intellect Design Arena, India Cements and Info Edge (India). In the index option segment, maximum OI continues to be seen in the 17900 -18200 calls and 16900 -17150 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short-term expectation of volatility increased by 5.47% and reached 18.68. The 50 share Nifty down by 231.10 points or 1.31% to settle at 17,374.75.

Nifty February 2022 futures closed at 17330.50 (LTP) on Friday, at a discount of 44.25 points over spot closing of 17374.75, while Nifty March 2022 futures ended at 17400.00 (LTP), at a premium of 25.25 points over spot closing. Nifty February futures saw an addition of 7,183 units, taking the total outstanding open interest (contracts) to 1,90,488 units. The near month derivatives contract will expire on February 24, 2022 (Provisional).

From the most active contracts, Divi's Laboratories February 2022 futures traded at a premium of 1.15 points at 4284.05 (LTP) compared with spot closing of 4282.90. The numbers of contracts traded were 33,743 (Provisional).

Tata Steel February 2022 futures traded at a premium of 0.10 points at 1251.90 (LTP) compared with spot closing of 1251.80. The numbers of contracts traded were 28,260 (Provisional).

Reliance Industries February 2022 futures traded at a premium of 0.85 points at 2373.40 (LTP) compared with spot closing of 2372.55. The numbers of contracts traded were 25,987 (Provisional).

Infosys February 2022 futures traded at a premium of 0.15 points at 1719.80 (LTP) compared with spot closing of 1719.65. The numbers of contracts traded were 24,156 (Provisional).

TCS February 2022 futures traded at a premium of 10.50 points at 3703.50 (LTP) compared with spot closing of 3693.00. The numbers of contracts traded were 17,524 (Provisional).

Among, Nifty calls, 17600 SP from the February month expiry was the most active call with an addition of 3,945 units open interests. Among Nifty puts, 17300 SP from the February month expiry was the most active put with an addition of 10,283 units open interests. The maximum OI outstanding for Calls was at 18000 SP (50,842 units) and that for Puts was at 17000 SP (71,102 units). The respective Support and Resistance levels of Nifty are: Resistance 17,452.00 -- Pivot Point 17,377.50 -- Support -- 17,300.25.

The Nifty Put Call Ratio (PCR) finally stood at (1.28) for February month contract. The top five scrips with highest PCR on Vedanta (1.09), Escorts (0.97), Indigo (0.94), Aurobindo Pharma (0.86) and Bank of Baroda (0.83).

Among most active underlying, Reliance Industries witnessed a contraction of 576 units of Open Interest in the February month futures contract, Tata Steel witnessed contraction of 861 units of Open Interest in the February month futures contract, Tata Motors witnessed an addition of 704 units of Open Interest in the February month futures contract, ICICI Bank witnessed an addition of 941 units of Open Interest in the February month futures contract and Divi's Laboratories witnessed an addition of 4,242 units of Open Interest in the February month futures contract (provisional).