For Traders: Derivatives summary, View on Equity Market and Rupee

Nifty December futures closed at a premium of 34.35 points versus premium of 48.45 points. The market added Rs 53387 cr in open interest, taking the total open interest in the F&O segment to Rs. 4,39,079 crore. The Nifty call option added 27.81lakh shares in open interest and the put option added 133.96 lakh shares in open interest. CANBK (27%) SAIL (18%), MOTHERSUMI (17%), APOLLOHOSP (15%) UPL (14%) and GODREJPROP (13%) were the top gainers in terms of open interest. MGL (-14), CHOLAFIN (-10%), LICHSGFIN (-9%) and BAJAJ-AUTO (-6%) and INFY (-6%) were the top losers in terms of open interest. Overall futures & options volumes currently stand at 207.73 lakh contracts, with a turnover of Rs 1748725 cr. Volumes in the F&O segment were higher as compared to the previous trading session.

Market commentary On December 1, 2020, the benchmark indices opened with mild gain in line with mixed cues from global markets. Thereafter nifty went upside due to buying at lower levels in large cap stocks. All sectoral indices closed in the green zone except nifty FMCG with a gain of 1-2%. Stocks like GAIL, SUNPHARMA, INDUSINDBNK, TECHM and UPL were top gainers that rose by around 3-4% while stocks like NESTLE, KOTAKBANK, TITAN, BAJFINANCE and HDFCBANK were top losers that fell by around 1-2%. The Nifty closed at around 13136 levels with a gain of 0.91%

Daily view:

About 0.28 lakh shares were shed in open interest with an increase in prices this indicates that short covering was observed by market participants. On the options front, the volatility index decreased by 0.25%.

Market Analysis by Ajit Mishra, VP - Research, Religare Broking Ltd 

Markets started the week on a robust note and gained over a percent, in continuation of the prevailing trend. After flat start, the benchmark gradually inched higher as the session progressed and settled around the day’s high. Amid all, healthy buying was witnessed in sectors such as pharma, IT and real estate. Consequently, the Nifty ended on a strong note at 13,109 levels, up by 1.1%. The broader markets too remained buoyant and ended with gains in the range of 0.8-1%.

The up move in the index was largely in reaction to the better than expected GDP numbers and consistency in GST revenue figures. Now, all eyes would be on RBI’s monetary policy meet. Considering the impending event, we reiterate our positive yet cautious approach and suggest maintaining focus on the selection of stocks.

Rupee view by Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking Ltd 

An incessant rally in domestic equity indices and slide in greenback towards two and half year lows has paved the way for a sharp appreciation in rupee of around 0.64% towards 74.44 mark, wherein it has breached the crucial barrier of 73.80 mark. More positive news about another promising vaccine candidate which looks set to be rolled out soon and upbeat manufacturing data from China has cheered the street and raised hopes of a swiffer recovery. This is leading investors to dump dollars and move towards riskier currencies, despite the warning by the Fed Chair that significant challenges and uncertainties for the US economy still remain. All eyes will now be on the Fed’s upcoming meeting, where it is likely to come out with further monetary easing measures to boost the economy, amid no further fiscal support in the last few months. Nonetheless, with the 73.80 mark being taken out, we believe that rupee can witness further strength towards the 73.00-73.10 mark in coming days.