WHAT LIES AHEAD : NEAR-TERM PICTURE
SPOT NIFTY : Indian stock markets witnessed a scintillating rally last week and kicked off the current week on a positive note as the outcome of the G20 summit lifted the market sentiments. However, the markets pared most of the gains to end flat. It seemed like a routine profit-booking after a sharp upside rally, however, the scary picture of the global peers, especially the US markets took the market across the globe by surprise as it witnessed a harsh fall on Tuesday as fears about a weaker economy came to the fore, as the yield curve presented an inverted picture after a long time. An inverted yield curve represents a preference for the shorter term debt due to uncertainty surrounding in the longer end of the curve. This had a rub-off effect on all other global peers and the Indian markets too remained under pressure and failed to take any sense of relief with Reserve Bank of India’s (RBI) policy decision to keep the repo rate unchanged. The weakness persisted in the Thursday’s session as well and the Nifty has lost almost 2.60 per cent during the week. After starting its upward rally from the lower level of 10,490, Nifty registered a high of 10,941 and was seen resisting its important 100-day moving average. After resisting around the the moving average, Nifty witnessed correction and during this correction phase Nifty filled the gap of November 29 and slipped below its crucial moving average, i.e. 200-day moving average and also its 21-day moving average. On Thursday, Nifty not only opened with a gap-down, but the bears did get momentum on the downside after a gap-down start and ended the day near the lowest level of the day. Going ahead, the level of 10,44010,480 is a crucial support for the Nifty, while on the upside, any upmove is likely to be resisted around the zone of 10,74810,723 as this is the gap area created on December 6 and also
the 200-day moving average is placed near this region. NIFTY DERIVATIVES: The Indian Volatility Index (VIX), a gauge for market’s short term expectation of volatility, jumped by 4.95 per cent to end at 19.30. Nifty December 2018 future last price stood at 10619.80 at a premium of 18.65 points over the spot closing of 10601.15. Nifty January 2019 future last price stood at 10666 at a premium of 64.85 point over the spot closing of 10,601.15. The Nifty Put-Call Ratio (PCR) Open Interest-wise stood at 1.08 for the December month contract. Among Nifty Calls, 11,000 strike price from the December month expiry was the most active Call. Among Nifty Puts, 10,500 strike price for the December month expiry was the most active Put. For the December series, the maximum OI outstanding for Puts was at 10,000 strike price, and that for Calls, it was at 11,000 strike price.