Markets and News

Today is Chinese new year according to their lunar calendar and China will be in celebrations for almost a week and many Asian markets like Hong Kong, Korea and Taiwan will be off for next few days. Japan is the only market that would be trading today in Asia that will give us some indication on how Asia is doing. US markets ended in green last night and that will rub off to India today. Brent crude is at 64 dollars but the worries on US bond yields continue to rise with US 10 year crossing 2.92% and this will for sure will have some impact on Indian bonds as well as equities.

Domestic Cues

On domestics there was a 1.8 billion dollar fraud that was committed on PNB in the form of loans given to Gems and Jewellery sector. That could act as a big jolt to the banking sector that is already suffering from the RBI regulations. PNB has cautioned 30 banks about a possibility of this fraud extending to other banks. This fraud was detected in one mumbai branch of PNB, a diamond dealer named Nirav Modi seems to be in the eye of the storm and the names of the promoters of Geetanjali Gems is also doing rounds. All this will have some impact on the banking sector for sure.

Derivatives Action

On the derivatives front, yesterday there was a day where some buying happened in the Nifty futures and the long positions in the futures went up to 45% from 43%. Now it seems to be slowly going up. On the options front 10600 saw maximum open interest of 9.5 lakh contracts getting created there. The 10700 call also added 3 lakh contracts and at 30 rupees premium 10730 is the roof for the series. On the put side 10500 saw the maximum open interest of 4.4 lakh contracts while 10400, 10300 puts shed open interest. 10500 put at 130 rupees indicate a support coming at 10380. So, now the contours for Feb expiry are clearly defined. 10440 will be a strong support and 10650 a strong resistance. The outer boundaries for this are 10380 and 10730.

What is the Nifty call for the day?

Yesterday’s last 30 minute fall triggered by PNB fraud will be digested by the market today and we will have an open close to 10550 levels and 10580-10610 will offer a resistance and if that is not taken out Nifty will spend time in that range On the down side yesterday’s low at 10440 might offer a strong support. Today is not a wise day to take a position. Wait and watch.

What is the bank nifty call for the day?

Today is the expiry for the bank Nifty and the pressure of PNB fraud might still have an impact on the index. It is better to take positions as the day progress and bank nifty intraday might touch 25250 levels and on the upside 25600 s a major resistance. Go for puts and calls within this range and bank nifty will be flat today.