Nifty ends flat with negative bias; holds above 8,200 mark

After witnessing drubbing for two consecutive sessions, fifty stock index, Nifty, consolidating on Monday, ended flat with negative bias as selling momentum in the equities persisted, however the losses were capped as buying appeared in banking, Finance and Media stocks. Though most of the sectoral indices ended in red, IT and Realty were the top losing indices down by over a percent each. Selling activity gathered momentum on disappointing economic data as industrial production contracted by 4.2 percent in October, moreover the weak trade in Asian peers on account of global growth concerns also weighed on the sentiments. Some weakness also came with the report that foreign portfolio investors (FPIs) sold shares worth a net Rs 864.96 crore on December 12, 2014. However, losses were limited as November WPI came in at 0 percent, a five-year low, down from from its October level of 1.77 percent led by a drop in fuel prices. Meanwhile, some traders remained on the sidelines and refrained from any buying activity ahead of the two-day Federal Open Market Committee (FOMC) monetary policy review, which begins today.

Nifty made a sluggish start as funds and retail investors engaged in reducing positions after October industrial production contracted sharply, amid a weak trend in the Asian region. Thereafter the index traded near neutral line for most part of the day’s trade, lacking any significant upside triggers as investors engaged themselves in few stocks. Eventually, the index ended the day’s trade with a marginal cut of over 4 points, holding its crucial 8,200 mark.

In the index options segment, maximum OI continues to be seen in the 8500-8400 calls and 8200-8100 puts indicating the expected trading range. In today's session, the 8200, 8300 and 8400 Call strikes saw addition of 3.53, 8.16 and 6.60 lakh shares, respectively. On the other hand, 8200, 8100 and 8000 Put strikes saw addition of 6.48, 4.47 and 2.34 lakh shares, respectively.

The top gainers from the F&O segment were Kotak Bank, HDFC and Adani Ports. On the other hand, the top losers were GMR Infrastructure, DLF and BPCL. 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 1.95% and reached 14.02. The 50-share CNX Nifty decreased by 4.50 points or 0.05% to settle at 8,219.60. Nifty December 2014 futures closed at 8267.20 on Monday at a premium of 47.60 points over spot closing of 8,219.60, while Nifty January 2014 futures ended at 8330.10 at a premium of 110.50 points over spot closing. Nifty December futures saw an addition of 0.39 million (mn) units, taking the total outstanding open interest (OI) to 23.54 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 2.90 points at 312.50 compared with spot closing of 309.60. The number of contracts traded were 23,499.

ICICI Bank December 2014 futures traded at a premium of 0.45 points at 347.65 compared with spot closing of 347.20. The number of contracts traded were 13,828.

HDFC Bank December 2014 futures traded at a premium of 6.00 points at 948.25 compared with spot closing of 942.25. The number of contracts traded were 21,310.

Reliance Industries December 2014 futures traded at a premium of 2.70 points at 884.10 compared with spot closing of 881.40. The number of contracts traded were 22,101.

ONGC December 2014 futures traded at a discount of 2.50 points at 340.20 compared with spot closing of 342.70. The number of contracts traded were 13,439.Among Nifty calls, 8300 SP from the December month expiry was the most active call with an addition of 0.81 million open interests. Among Nifty puts, 8,200 SP from the December month expiry was the most active put with an addition of 0.64 million open interests. The maximum OI outstanding for Calls was at 8500 SP (7.07 mn) and that for Puts was at 8,200 SP (4.92 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8257.17 --- Pivot Point 8204.83 --- Support --- 8167.27.

The Nifty Put Call Ratio (PCR) finally stood at 0.84 for December month contract. The top five scrips with highest PCR on OI were ITC (1.38), Kotak Bank (1.12), MRF (1.00), Eicher Motors (0.90) and Ranbaxy (0.86). 

Among most active underlying, State Bank of India witnessed an addition of 1.27 million of Open Interest in the December month futures contract, followed by Tata Consultancy Services witnessing an addition of 0.30 million of Open Interest in the December month contract; while Reliance Industries witnessed  a contraction of 0.35 million of Open Interest, Infosys witnessed a contraction of 0.27 million of Open Interest in the December month contract and Axis Bank witnessed a contraction of 0.67 million of Open Interest in the December month's future contract.