Nifty snaps three days winning streak; ends below 8,400 mark

Erasing the previous session’s gains, CNX Nifty ended the session below its crucial 8,400 level with a cut of three tens of a percent on heavy selling in Oil & Gas, realty and PSU sector stocks. The sentiments were dampened after India's gold imports, one of the biggest contributors to the country's trade deficit, jumped to about 150 tonnes in October from 143 tonnes in September 2014. Besides, some concerned also came after the government raised the excise duty on petrol and diesel to boost revenues and contain budget borrowing that could put off a likely cut in the retail prices of the two fuels. However, losses remained capped as the OECD in its latest economic report has highlighted that India is the only major economy where the CLI points to a pick-up in growth momentum. Furthermore, the improvement in macro-economic indicators such as IIP and inflation also buoyed the market sentiments. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 459.47 crore on November 12, 2014.

After gap up opening, nifty showed some strength in morning trades, but the sentiments turned pessimistic in late morning trades and index start drifting lower on minor profit-booking activities by market-participants post record high levels scaled by the bourses in previous trading session. Although, Market traded in the tight range till mid afternoon trade lingering near its neutral lines but, it was the late afternoon trade where market witnessed steep fall of about 65 points and modest recovery of 35 points.  Eventually, the index ended the day’s trade with a cut of over 25 points, holding its crucial 8,350 mark.

Coming to F&O market internals, in the index options segment, maximum OI continues to be seen in the 8400-8500 calls and 8300-8200 puts indicating the expected trading range. In today's session, the 8400, 8500 and 8600 Call strikes saw addition of 5.37, 3.18 and 0.80 lakh shares, respectively. On the other hand, 8400, 8300 and 8200 Put strikes saw contraction of 3.79, 7.01 and 0.40 lakh shares, respectively.

The top gainers from the F&O segment were Colgate Palmolive, Jubilant Foodworks and Hexaware Technologies. On the other hand, the top losers were Hindustan Petroleum Corporation, Unitech and BPCL. Meanwhile, India VIX - the gauge of underlying volatility in the market - has declined in today's session, which indicates that traders have slowdown buying options contracts.  

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 4.40% and reached 13.80. The 50-share CNX Nifty decreased by 25.45 points or 0.30% to settle at 8,357.85. Nifty November 2014 futures closed at 8380.10 on Thursday at a premium of 22.25 points over spot closing of 8,357.85, while Nifty December 2014 futures ended at 8426.95 at a premium of 69.10 points over spot closing. Nifty November futures saw contraction of 0.67 million (mn) units, taking the total outstanding open interest (OI) to 23.10 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 8.30 points at 922.30 compared with spot closing of 914.00. The number of contracts traded were 24,270.

Reliance Industries November 2014 futures traded at a premium of 4.85 points at 974.05 compared with spot closing of 969.20. The number of contracts traded were 17,447.

Hindalco Industries November 2014 futures traded at a premium of 1.00 points at 152.75 compared with spot closing of 151.75. The number of contracts traded were 17,559.

Axis Bank November 2014 futures traded at a premium of 2.00 points at 475.95 compared with spot closing of 473.95. The number of contracts traded were 14,864.

Tata Steel November 2014 futures traded at a premium of 1.25 points at 472.10 compared with spot closing of 470.85. The number of contracts traded were 31,983.

Among Nifty calls, 8400 SP from the October month expiry was the most active call with an addition of 0.47 million open interests. Among Nifty puts, 8,300 SP from the November month expiry was the most active put with a contraction of 0.75 million open interests. The maximum OI outstanding for Calls was at 8500 SP (5.84 mn) and that for Puts was at 8,300 SP (5.34 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8403.78--- Pivot Point 8362.07 --- Support --- 8316.13.

The Nifty Put Call Ratio (PCR) finally stood at 1.25 for November month contract. The top five scrips with highest PCR on OI were Dr. Reddy's Laboratories (1.88), DLF (1.55), Ranbaxy (1.51), Axis Bank (1.40) and JSW Steel (1.15). 

Among most active underlying, State Bank of India witnessed an addition of 0.20 million of Open Interest in the November month futures contract, followed by Infosys witnessing an addition of 0.02 million of Open Interest in the November  month contract; while Tata Steel witnessed a contraction of 0.01 million of Open Interest, Ashok Leyland witnessed a contraction of 1.33 million of Open Interest in the November month contract and ICICI Bank  witnessed a contraction of 0.96 million of Open Interest in the November month's future contract.