Nifty ends flat with negative bias

The local benchmark, Nifty consolidated and ended the choppy day of trade on a flat note on Tuesday. Although, the market opened higher on the back of strong global cues and record intraday high in late morning session, but profit booking emerged at higher levels and the index started drifting lower till late afternoon trade. However, some value buying in dying hours helped market to end the session flat with negative bias.

Market, for most part of the session, oscillated around the neutral line as investors remained on the sidelines in the absence of any significant trigger at domestic front. Sentiments got a boost with Finance Minister Arun Jaitley’s statement that inflation has moderated and global fuel price has eased and hoped that Reserve Bank of India would prune interest rates as it will give a ‘good fillip’ to the Indian economy. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 656.37crore on November 17, 2014. However, gains remained capped as gold imports surged to $4.18 billion from $3.75 billion in October 2014. On a year-on-year basis, gold imports, one of the biggest contributors to the country's trade deficit, jumped to $4.17 billion from $1.09 billion mainly because of the festivals like Diwali and Dhanteras, which are considered as most auspicious occasions in India to buy the yellow metal.

Traders were seen piling positions in Capital Goods, Infrastructure and Power sector while selling was witnessed in information technology (IT), Realty and Consumer Durables sector stocks. Meanwhile, shares of jewellery companies declined on concerns that the Reserve Bank of India (RBI) may increase the restrictions on gold imports.

After today’s consolidation,  nifty may show some amount of correction in near future as rich valuations and global uncertainties could prompt investors to book some profits. 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.

The top gainers from the F&O segment were Reliance Communications, Jain Irrigation Systems and Bharat Forge. On the other hand, the top losers were Ashok Leyland, Voltas and Housing Development Finance Corporation. 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 2.39% and reached 14.06. The 50-share CNX Nifty decreased by 4.85 points or 0.06% to settle at 8,425.90. Nifty November 2014 futures closed at 8451.90 on Tuesday at a premium of 26.00 points over spot closing of 8,425.90, while Nifty December 2014 futures ended at 8498.40 at a premium of 72.50 points over spot closing. Nifty November futures saw contraction of 0.19 million (mn) units, taking the total outstanding open interest (OI) to 22.61 mn units. The near month derivatives contract will expire on November 27, 2014.

From the most active contracts, IDFC November 2014 futures traded at a premium of 1.05 points at 163.10 compared with spot closing of 162.05. The number of contracts traded were 18,845.

Reliance Communications November 2014 futures traded at a premium of 0.90 points at 115.70 compared with spot closing of 114.80. The number of contracts traded were 31,457.

HDFC Bank November 2014 futures traded at a premium of 2.70 points at 936.65 compared with spot closing of 933.95. The number of contracts traded were 34,617.

Reliance Industries November 2014 futures traded at a premium of 3.60 points at 991.10 compared with spot closing of 987.50. The number of contracts traded were 22,905.

Tata Steel November 2014 futures traded at a premium of 2.70 points at 488.65 compared with spot closing of 485.95. The number of contracts traded were 27,202.Among Nifty calls, 8500 SP from the October month expiry was the most active call with a contraction of 0.23 million open interests. Among Nifty puts, 8,400 SP from the November month expiry was the most active put with an addition of 0.68 million open interests. The maximum OI outstanding for Calls was at 8500 SP (5.81 mn) and that for Puts was at 8,300 SP (6.32 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8451.18--- Pivot Point 8429.22--- Support --- 8403.93.

The Nifty Put Call Ratio (PCR) finally stood at 1.39 for November month contract. The top five scrips with highest PCR on OI were Eicher Motors (1.85), DLF (1.52), Bank of Baroda (1.33), Dr. Reddy's Laboratories (1.19) and Axis Bank (1.18). 

Among most active underlying, State Bank of India witnessed a contraction of 0.51 million of Open Interest in the November month futures contract, followed by Reliance Capital witnessing a contraction of 1.10 million of Open Interest in the November  month contract; while Reliance Communications witnessed an addition of 1.78 million of Open Interest, Reliance Industries witnessed a contraction of 0.72 million of Open Interest in the November month contract and Larsen & Toubro witnessed an addition of 0.04 million of Open Interest in the November month's future contract.