Subdued global cues drag Nifty below 8,300 mark

After witnessing consolidation in previous session, the domestic index CNX Nifty resumed its southward journey on Thursday and finished the day’s trade with a cut of over half a percentage point. The benchmark got off to a pessimistic start following its weak Asian peers due to the overnight weak close on Wall Street and as concerns about the health of the global economy. Back home, there was some cautiousness with the government slated to announce the industrial production data for October 2014 and annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India for November 2014 tomorrow.

The index losing steam thereafter and even drifted to the lowest point in the session in early noon trades. Nevertheless, the index managed to pare some of the losses in early afternoon trades post the sanguine European market opening. Some support also came in from United Nations report that India’s economic growth is expected to improve to 6.3% in 2016 with the country leading economic recovery in South Asia. However, the selling pressure once again appeared in the late afternoon trades as investors sold stocks across the board on risk aversion sentiment. Rupee slipping to its nine-month intraday low too weighed on the sentiments. Eventually, the index ended the day’s trade with a cut of over half a percentage point, below its crucial 8,300 mark. Traders were seen piling positions in Media and Pharma stocks while selling was witnessed in Energy, Realty and IT sector stocks.

In the index options segment, maximum OI continues to be seen in the 8500-8600 calls and 8400-8300 puts indicating the expected trading range. In today's session, some traders exited from 8600, 8500 and 8400 puts on the back of profit booking. On the other hand, 8300, 8400 and 8500 calls strikes saw addition of 6.17, 11.47 and 10.56 lakh shares, respectively.

The top gainers from the F&O segment were Wockhardt, STAR and IDFC. On the other hand, the top losers were Havells, HDIL and Bharat Forge. 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 increased by 4.33% and reached 12.77. The 50-share CNX Nifty decreased by 62.75 points or 0.75% to settle at 8,292.90. Nifty December 2014 futures closed at 8342.10 on Thursday at a premium of 49.20 points over spot closing of 8292.90, while Nifty January 2014 futures ended at 8402.45 at a premium of 109.55 points over spot closing. Nifty December futures saw an addition of 0.16 million (mn) units, taking the total outstanding open interest (OI) to 22.14 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 2.55 points at 316.35 compared with spot closing of 313.80. The number of contracts traded were 28,350.

ICICI Bank December 2014 futures traded at a premium of 2.50 points at 350.10 compared with spot closing of 347.60. The number of contracts traded were 16,270.

HDFC Bank December 2014 futures traded at a premium of 5.50 points at 939.00 compared with spot closing of 933.50. The number of contracts traded were 15,826.

Reliance Industries December 2014 futures traded at a premium of 7.75 points at 913.75 compared with spot closing of 906.00. The number of contracts traded were 35,314.

Tata Motors December 2014 futures traded at a premium of 3.40 points at 507.70 compared with spot closing of 504.30. The number of contracts traded were 15,441.

Among Nifty calls, 8400 SP from the December month expiry was the most active call with an addition of 1.14 million open interests. Among Nifty puts, 8,300 SP from the December month expiry was the most active put with an addition of 0.14 million open interests. The maximum OI outstanding for Calls was at 8500 SP (7.33 mn) and that for Puts was at 8,300 SP (4.78 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8336.67 --- Pivot Point 8304.53 --- Support --- 8260.77.

The Nifty Put Call Ratio (PCR) finally stood at 0.85 for December month contract. The top five scrips with highest PCR on OI were ITC (1.49), DLF (1.15), MRF (1.00), Sun TV (0.99) and Kotak Bank (0.98). 

Among most active underlying, Reliance Industries witnessed an addition of 1.42 million of Open Interest in the December month futures contract, followed by State Bank of India witnessing a contraction of 0.54 million of Open Interest in the December month contract; while Infosys witnessed  an addition of 0.14 million of Open Interest, Larsen & Toubro witnessed an addition of 0.55 million of Open Interest in the December month contract and Axis Bank witnessed a contraction of 0.81 million of Open Interest in the December month's future contract.