Hi Peter! Really appreciate your active responses!

I've seen hotspots occuring in contact region even for a simple system like a small cylindrical pin (convex, let say) pressing onto a concave (more than thrice the size of the pin) slot. 

I've experimented with multiple detection methods, formulation, controlling penetration in addition to sphere of influence refinement upto element size of 0.001" but couldnt get away with the singularity. It rather was too odd where the maximum tensile principal stress in the model would be half the yield for the metal. But compressive stresses around hotspot would be almost 6 times the yield! 

Any suggestions for getting around such systems?

Thanks in advance!