Nifty slips below 50-day moving average

Weak run of Nifty continued on Tuesday as well, with the benchmark witnessing a triple digit plunge and slipping below the crucial psychological level of 8100 and its 50-day moving average. It was across the board selling triggered by the weakness in global markets on economic growth concern that led the markets for a sharp fall. On the domestic front pressure was exerted with India’s trade deficit widening to the highest in 18 months in November to $16.86 billion, compared with $9.57 billion a year earlier and $13.35 billion in October, due to increased gold imports. The sharp plunge in domestic currency too contributed to the downfall. Indian rupee slipped to its 13 months low as foreign institutional investors are buying dollars and getting out of riskier assets.

Earlier the day started on a somber note and Nifty kept on losing ground till last, there was no attempt of recovery and the market surrendered to the bears amid intense selling. Barring IT, which gained due to dollar strength, all other sectoral indices suffered sharp losses for the day. Maximum cut was seen on Realty, Metal, PSU Banking, Finance and FMCG.

In the index options segment, maximum OI was seen in the 8400-8600 calls and 8000-8300 puts. The top gainers from the F&O segment were HCL Tech, TCS and BPCL. On the other hand, the top losers included SSLT, Dr Reddy and Hindalco.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 16.31% and reached 16.30. The 50-share CNX Nifty slumped by 152.00 points or 1.85% to settle at 8,067.60. Nifty December 2014 futures closed at 8116.00 on Tuesday at a premium of 48.40 points over spot closing of 8,067.60, while Nifty January 2014 futures ended at 8180.85 at a premium of 113.25 points over spot closing. Nifty December futures saw an addition of 0.40 million (mn) units, taking the total outstanding open interest (OI) to 23.94 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 2.40 points at 297.30 compared with spot closing of 294.90. The number of contracts traded were 39,373.

ICICI Bank December 2014 futures traded at a premium of 1.80 points at 332.90 compared with spot closing of 331.10. The number of contracts traded were 24,448.

HDFC Bank December 2014 futures traded at a premium of 3.70 points at 931.70 compared with spot closing of 928.00. The number of contracts traded were 30,299.

Reliance Industries December 2014 futures traded at a premium of 1.75 points at 868.75 compared with spot closing of 867.00. The number of contracts traded were 27,027.

Tata Steel December 2014 futures traded at a premium of 4.65 points at 391.65 compared with spot closing of 387.00. The number of contracts traded were 23,513.Among Nifty calls, 8200 SP from the December month expiry was the most active call with an addition of 2.94 million open interests. Among Nifty puts, 8,000 SP from the December month expiry was the most active put with an addition of 3.02 million open interests. The maximum OI outstanding for Calls was at 8500 SP (6.01 mn) and that for Puts was at 8,000 SP (7.05 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8153.77 --- Pivot Point 8103.18 --- Support --- 8017.02.

The Nifty Put Call Ratio (PCR) finally stood at 0.78 for December month contract. The top five scrips with highest PCR on OI were Kotak Bank (1.39), Eicher Motors (0.99), Ranbaxy (0.86), ITC (0.83) and UBL (0.82). 

Among most active underlying, State Bank of India witnessed an addition of 4.49 million of Open Interest in the December month futures contract, followed by Infy witnessing an addition of 0.54 million of Open Interest in the December month contract; while ICICI Bank witnessed  a contraction of 6.77 million of Open Interest, Axis Bank witnessed an addition of 2.68 million of Open Interest in the December month contract and Reliance Industries witnessed a contraction of 0.23 million of Open Interest in the December month's future contract.