Nifty ends below 8,550 mark on profit booking

After making a decent start, key Indian benchmark -- Nifty -- pared entire initial gains and ended the volatile day of trade in the red with a cut of over 26 points on Friday on the back of profit booking in final hour of trade. Sentiment on the street weakened as SEBI found 22 public sector companies including giants like ONGC, NTPC and IOC to have violated various capital market guidelines, while banking major SBI has filed for settlement of a case against it with the regulator. Traders even overlooked an HSBC survey, stating that manufacturing and services sectors in India expanded at a faster pace than China in November, even as emerging market output slipped for the second consecutive month to a six-month low. Furthermore, the global cues were not very supportive and after a modestly lower closing of the US markets, the Asian markets too remained cautious ahead of a monthly US jobs report. 

Most sectoral indices made a negative closing, however the biggest laggards that dragged the markets lower were Pharma along with information technology (IT) stocks, down by over a percent each, after the rupee strengthened against the dollar. However, gains in FMCG and Realty stocks have restrained the market to extend losses.

After gap up opening, nifty showed some strength in early morning trades, but the sentiments turned bearish in afternoon trades and index slipped into the red. Thereafter, the Index traded in the tight range till mid afternoon lingering near its neutral line and in the final hour of trade witnessed a steep fall of about 42 points on back of heavy selling pressure in healthcare along with IT and tech stocks. Finally, the index ended the day’s trade with a cut of over 26 points, holding its crucial 8500 mark.

The top gainers from the F&O segment were DLF, Ambuja Cements and Hindustan Zinc. On the other hand, the top losers were Siemens, Idea and STAR. In the index options segment, maximum OI continues to be seen in the 8600-8700 calls and 8400-8500 puts indicating the expected trading range. 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 3.98% and reached 11.95. The 50-share CNX Nifty decreased by 26.10 points or 0.30% to settle at 8,538.30. Nifty December 2014 futures closed at 8582.55 on Friday at a premium of 44.25 points over spot closing of 8538.30, while Nifty January 2014 futures ended at 8635.05 at a premium of 96.75 points over spot closing. Nifty December futures saw an addition of 0.24 million (mn) units, taking the total outstanding open interest (OI) to 20.14 mn units. The near month derivatives contract will expire on December 24, 2014. From the most active contracts, State Bank of India December 2014 futures traded at a premium of 2.20points at 319.75 compared with spot closing of 317.55. The number of contracts traded were 23,667.

Reliance Capital December 2014 futures traded at a premium of 4 points at 522.90 compared with spot closing of 518.90. The number of contracts traded were 19,183.

PNB December 2014 futures traded at a discount of 6.50 points at 1128.45 compared with spot closing of 1121.95. The number of contracts traded were 18,838.

Reliance Industries December 2014 futures traded at a premium of 8 points at 965.35 compared with spot closing of 957.35. The number of contracts traded were 17,606.

Bank of Baroda December 2014 futures traded at a premium of 8.75 points at 1113.30 compared with spot closing of 1104.55. The number of contracts traded were 15,974.

Among Nifty calls, 8600 SP from the December month expiry was the most active call with a contraction of 0.03 million open interests. Among Nifty puts, 8,500 SP from the December month expiry was the most active put with an addition of 0.01 million open interests. The maximum OI outstanding for Calls was at 8600 SP (5.41 mn) and that for Puts was at 8,500 SP (5.75 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8576.47--- Pivot Point 8550.18--- Support --- 8512.02.

The Nifty Put Call Ratio (PCR) finally stood at 0.92 for December month contract. The top five scrips with highest PCR on OI were Eicher Motors (2.06), ITC (1.38), DLF (1.29), PNB (1.25) and Sun TV (1.12). 

Among most active underlying, State Bank of India witnessed an addition of 0.63 million of Open Interest in the December month futures contract, followed by Infosys witnessing an addition of 0.33 million of Open Interest in the December month contract; while Axis Bank witnessed  an addition of 0.29 million of Open Interest, ICICI Bank witnessed a contraction of 1.37 million of Open Interest in the December month contract and Reliance Industries witnessed a contraction of 0.08 million of Open Interest in the December month's future contract.