Nifty skids lower for fifth day in a row; ends below 8050 level

The local benchmark, Nifty continued its southward journey for fifth consecutive day on Wednesday and finished the volatile day of trade with a cut of over thirty-seven points on sustained selling by funds and retail investors amid persistent dip in rupee. Market was entangled by global uncertainties due to fall in crude oil prices and Russian currency turmoil. Furthermore, concern over sluggish macro-economic data such as IIP and CAD and continued FII outflows also put pressure on the domestic sentiments. Foreign Portfolio Investors sold shares worth a net Rs 1,247.24 crore in the previous session. However, losses remained capped with report that Life Insurance Corporation of India (LIC), a powerful market player in India that has been known to support markets at times of vulnerability, bought into domestic equities to arrest the plunge of markets. Meanwhile, some Investors remained on the sidelines and refrained from any buying activity as they keenly await a statement from the US Federal Reserve, new economic projections and a press conference by Fed Chairwoman Janet Yellen.

After the subdued opening, the key gauges plunged to lowest point in the day on sharp across the board sell-off. Thereafter, the key indices failed to show any kind of fervor due to lack of encouraging leads. Though the index recovered from the lows of the day but could not succeed in minimizing the huge losses by the end of trading session. Eventually, the index ended the day’s trade with a cut of about half a percent, below its crucial 8,050 mark. Traders were seen piling positions in Metal, Oil & Gas and PSU stocks while selling was witnessed in Realty, Auto and Consumer Durables sector stocks.

The top gainers from the F&O segment were Rural Electrification Corporation, Rural Electrification Corporation and JP Associate. On the other hand, the top losers were Wockhardt, Apollo tyres and Amtek Auto. Meanwhile, the Nifty volatility index, India VIX, rose 3.79 per cent to 16.92, signaling a rise in fear among investors. Volatility may rise further as the fall in crude oil prices is hurting global financial market sentiment.

In the index options segment, maximum OI continues to be seen in the 8200-8300 calls and 8200-8100 puts indicating the expected trading range. In today's session, the 8000, 8100 and 8200 Call strikes saw addition of 11.20, 10.07 and 9.07 lakh shares, respectively. On the other hand, 7900, 7800 and 7700 Put strikes saw addition of 8.38, 18.55 and 7.06 lakh shares, respectively. Meanwhile, some profit booking was seen in 8000, 8100 and 8200 Puts, which contracted by 2.87, 5.60 and 8.21 lakh shares, respectively. 

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 3.79% and reached 16.92. The 50-share CNX Nifty slumped by 37.80 points or 0.47% to settle at 8,029.80. Nifty December 2014 futures closed at 8060.85 on Wednesday at a premium of 31.05 points over spot closing of 8,029.80, while Nifty January 2014 futures ended at 8128.10 at a premium of 98.30 points over spot closing. Nifty December futures saw an addition of 0.01 million (mn) units, taking the total outstanding open interest (OI) to 23.96 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 0.50 points at 303.35 compared with spot closing of 302.85. The number of contracts traded were 48,167.

ICICI Bank December 2014 futures traded at a premium of 0.90 points at 334.10 compared with spot closing of 333.20. The number of contracts traded were 29,584.

HDFC Bank December 2014 futures traded at a premium of 7.85 points at 926.85 compared with spot closing of 919.00. The number of contracts traded were 28,258.

Reliance Industries December 2014 futures traded at a premium of 2.60 points at 874.20 compared with spot closing of 871.60. The number of contracts traded were 23,926.

ONGC December 2014 futures traded at a premium of 1.95 points at 343.95 compared with spot closing of 342.00. The number of contracts traded were 18,406.Among Nifty calls, 8200 SP from the December month expiry was the most active call with an addition of 0.90 million open interests. Among Nifty puts, 8,000 SP from the December month expiry was the most active put with a contraction of 0.28 million open interests. The maximum OI outstanding for Calls was at 8300 SP (5.20 mn) and that for Puts was at 8,000 SP (6.09 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8087.42 --- Pivot Point 8024.38 --- Support --- 7966.77.

The Nifty Put Call Ratio (PCR) finally stood at 0.75 for December month contract. The top five scrips with highest PCR on OI were Kotak Bank (0.95), ZEEL (0.94), Eicher Motors (0.94), Sun TV (0.84) and Ranbaxy (0.83). 

Among most active underlying, State Bank of India witnessed a contraction of 2.74 million of Open Interest in the December month futures contract, followed by ICICI Bank witnessing a contraction of 0.85 million of Open Interest in the December month contract; while Axis Bank witnessed  a contraction of 1.30 million of Open Interest, Infosys witnessed an addition of 0.11 million of Open Interest in the December month contract and Tata Steel witnessed a contraction of 0.11 million of Open Interest in the December month's future contract.