Nifty ends flat; takes support at 8300 level

The local benchmark, Nifty consolidated and ended the choppy day of trade on a flat note on Friday. Although index opened flat taking cues from the regional peers, profit booking emerged at higher levels and the index started to drift lower in late morning session. Market, for rest of the session, traded in the tight range as investors remained sideways in the absence of any significant trigger at domestic front, however some value buying in dying hours helped market to end the session flat.

The sentiments were pessimistic from early trades after the Organisation for Economic Cooperation and Development (OECD) lowered India’s GDP growth forecast to 5.4% for this year from 5.7% projected earlier in September. Besides, Credit rating agency, Moody’s Investor Service statement that the asset quality of state owned banks would continue to be burdened by weak financial health of Indian corporate, too weighed on the sentiment. However, losses remained capped as Finance Minister Arun Jaitley promised reforms in labour, land acquisition and insurance laws to make regulations in India more business-friendly. Terming reforms as a long journey, Finance Minister added that the government is of the view of consistently pursuing the reforms agenda to boost the economic growth rather than taking one or two big bang steps. Traders were seen piling positions in Realty, Consumer Durables and TECK sector while selling was witnessed in Capital Goods, Metal and Power sector stocks.

The top gainers from the F&O segment were DLF, ZEEL and Hindustan Petroleum Corporation. On the other hand, the top losers were UCO Bank, GMR Infrastructure and JP Power. In the index options segment, maximum OI continues to be seen in the 8500-8400 calls and 8100-8000 puts indicating the expected trading range. Meanwhile, India VIX - the gauge of underlying volatility in the market - has risen in today's session as the Nifty halted six days of advances. The rise in implied volatility signals there could be a bit of profit booking going ahead.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 2.58% and reached 14.11. The 50-share CNX Nifty decreased by 1.30 points or 0.02% to settle at 8,337.00. Nifty November 2014 futures closed at 8381.65 on Friday at a premium of 44.65 points over spot closing of 8,337.00, while Nifty December 2014 futures ended at 8440.60 at a premium of 103.60 points over spot closing. Nifty November futures saw addition of 0.37 million (mn) units, taking the total outstanding open interest (OI) to 23.07 mn units. The near month derivatives contract will expire on November 27, 2014.

From the most active contracts, HDFC Bank November 2014 futures traded at a premium of 7.35 points at 906.85 compared with spot closing of 899.50. The number of contracts traded were 26,032.

Axis Bank November 2014 futures traded at a premium of 1.85 points at 471.85 compared with spot closing of 470.00. The number of contracts traded were 18,077.

Tata Steel November 2014 futures traded at a premium of 3.05 points at 474.15 compared with spot closing of 471.10. The number of contracts traded were 19,021.

ICICI Bank November 2014 futures traded at a premium of 4.70 points at 1694.40 compared with spot closing of 1689.70. The number of contracts traded were 23,513.

Sun Pharmaceutical Industries November 2014 futures traded at a premium of 0.75 points at 895.75 compared with spot closing of 895.00. The number of contracts traded were 24,789. Among Nifty calls, 8400 SP from the October month expiry was the most active call with an addition of 0.42 million open interests. Among Nifty puts, 8,300 SP from the November month expiry was the most active put with an addition of 0.15 million open interests. The maximum OI outstanding for Calls was at 8500 SP (4.48 mn) and that for Puts was at 8,000 SP (5.79 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8368.15--- Pivot Point 8329.20--- Support --- 8298.05.

The Nifty Put Call Ratio (PCR) finally stood at 1.29 for November month contract. The top five scrips with highest PCR on OI were AXIS Bank (1.30), Oriental Bank of Commerce (1.26), ZEEL (1.22), DLF (1.20) and Dr. Reddys Laboratories (1.19). 

Among most active underlying, State Bank of India witnessed a contraction of 0.01 million of Open Interest in the November month futures contract, followed by ICICI Bank witnessing a contraction of 0.08 million of Open Interest in the November  month contract; while Axis Bank witnessed an addition of 2.08 million of Open Interest, Larsen & Toubro witnessed a contraction of 0.09 million of Open Interest in the November month contract and Infosys witnessed a contraction of 0.03 million of Open Interest in the November month's future contract.