Bears run berserk throughout session; Nifty ends below 8500 level

Bears hammered bulls throughout the session giving bulls no chance to pounce back, taking full control over the market, bears dragged Nifty below its crucial 8,500 mark on account of profit booking after sharp gains in the previous few sessions. Weakness prevailed on report that India's economic growth probably slowed to around 5 per cent in the three months to September, slipping from 5.7 per cent in the previous quarter. Sentiments on the street weakened further after SEBI imposed restrictions on issue of Offshore Derivative Instruments (ODIs) by foreign portfolio investors (FPIs).

Furthermore, global cues too were not very supportive and despite a flat but positive close of the US markets, the Asian markets remained cautious and some of the major indices even ended in red. Although trade continued on pessimistic note but bulls got some respite in final hour of trade, which to an extent trimmed the level of damage caused to the market. Support came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 407.42 crore on November 24, 2014.

After a negative opening, nifty gradually enlarged its losses and slipped below the 8500 level in early morning deals. Thereafter, the key indices failed to show any kind of fervor due to lack of encouraging leads. The key gauges traded on a lackluster note for most part of the trades. However, mild short covering in the final hour of trade helped Nifty to ease some of its losses. Barring Pharma and Media, all other NSE sectoral indices ended significantly in the red. Among them, realty index fell the most by 3.51 per cent, followed by FMCG 2.90 per cent and PSU Bank 2.19 per cent.

The market is likely to remain volatile this week with traders rolling over positions in the futures & options (F&O) segment from November to December 2014 series on Thursday and data on second quarter Current Account Deficit and official second quarter GDP figures due later in the week. Coming to F&O market internals, in the index options segment, maximum OI continues to be seen in the 8500-8600 calls and 8300-8400 puts indicating the expected trading range.

The top gainers from the F&O segment were BHEL, All Prices in Apollo Hospitals Enterprise and Dabur. On the other hand, the top losers were India Cements, Unitech and JP Power. Meanwhile, India VIX - the gauge of underlying volatility in the market - has risen in today's session, which shows that traders are buying more options contracts as insurance against declines in the market.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 3.90% and reached 13.52. The 50-share CNX Nifty decreased by 67.05 points or 0.79% to settle at 8,463.10. Nifty November 2014 futures closed at 8466.50 on Tuesday at a premium of 3.40 points over spot closing of 8,463.10, while Nifty December 2014 futures ended at 8516.10 at a premium of 53 points over spot closing. Nifty November futures saw contraction of 5.8 million (mn) units, taking the total outstanding open interest (OI) to 13.05 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 0.80 points at 954.35 compared with spot closing of 953.55. The number of contracts traded were 1,10,504.

HDFC Bank December 2014 futures traded at a premium of 10.25 points at 963.80 compared with spot closing of 953.55. The number of contracts traded were 61,645.

Reliance Industries November 2014 futures traded at a premium of 0.55 points at 993.55 compared with spot closing of 993.00. The number of contracts traded were 45,550.

State Bank of India November 2014 futures traded at a premium of 0.75 points at 305.20 compared with spot closing of 304.45. The number of contracts traded were 42,117.

Reliance Capital November 2014 futures traded at a premium of 1.50 points at 482.20 compared with spot closing of 480.70. The number of contracts traded were 40,370.

Among Nifty calls, 8500 SP from the October month expiry was the most active call with an addition of million open interests. Among Nifty puts, 8,400 SP from the November month expiry was the most active put with a contraction of 0.56 million open interests. The maximum OI outstanding for Calls was at 8500 SP (6.32 mn) and that for Puts was at 8,300 SP (6.17 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8522.48 --- Pivot Point 8475.97 --- Support --- 8416.58. The Nifty Put Call Ratio (PCR) finally stood at 1.49 for November month contract. The top five scrips with highest PCR on OI were Dabur (1.82), Dr. Reddy's Laboratories (1.74), DLF (1.69), SBI (1.39) and HDFC (1.23). 

Among most active underlying, HDFC Bank witnessed a contraction of 1.06 million of Open Interest in the November month futures contract, followed by Infosys witnessing a contraction of 0.68 million of Open Interest in the November  month contract; while State Bank of India witnessed a contraction of 9.30 million of Open Interest, ICICI Bank witnessed a contraction of 2.47 million of Open Interest in the November month contract and Reliance Industries witnessed a contraction of 7.36 million of Open Interest in the November month's future contract.