Nifty ends lower ahead of the F&O expiry

The fifty stock index -- Nifty -- ended in red as investors turned cautious and book profit ahead of a key two-day US Federal Reserve Meeting, which is scheduled to start from tomorrow and domestic expiry derivative series for the month of October on Thursday. Sentiments remained subdued with an Assocham study which said that inflation may have dropped significantly from last year, but most Indians still find prices of goods and services consumed on a daily basis growing beyond their comfort level. On the global front, most shares in Asia marked ended in green after Chinese authorities unleashed their latest round of easing measures, although Hong Kong and Australia gave up earlier gains, amid lingering worries over China’s slowing growth. Furthermore, US stocks ended higher on Friday following strong earnings from Microsoft, Google parent Alphabet and Amazon. On the other hand, most of the European markets fell in early trade as euphoria about the prospect of further central bank policy easing faded, with investors warning against over-confidence ahead of another week of interest rate decisions.

Back home, after getting gap up start, Indian benchmark Nifty slipped into negative territory in late morning trade, thereafter the index failed to show any favor and remained weak throughout the session, and ended near the lowest point of the day, with the loss of over four tens of a percent. Sentiments remained down-beat with the report that India is expected to clock 7.4 per cent growth rate this fiscal with a downside risk amid weak exports, slow pace of structural reforms and investment spending. Weak opening in European counters too dampened the sentiments with CAC, DAX and FTSE were trading lower in early deals. However, losses remained capped with the report that foreign portfolio investors (FPI) have poured more than Rs. 19,000 crore in the Indian capital markets in October so far, their highest level in six months. Some support also came with State finance ministers are scheduled to meet on November 20 to discuss the model Goods and Services (GST) Tax law as well as the integrated-GST or iGST legislation. On the sectoral front, Oil & gas stocks also came under selling pressure with the Goldman Sachs’s report that oil prices could drop 'sharply lower' as refined product storage sites come close to filling, stoking a glut that has already seen crude prices fall by more than half since June 2014. However, better-than-expected Q2 earnings from Bajaj Auto and hopes of higher demand ahead of the festive season have lifted the sentiment in auto stocks. Some buying witnessed in select metal stocks after report that the government is considering doubling the import duty on aluminum from the current level of 10 per cent.

The top gainers from the F&O segment were Godrej Industries, Kaveri Seed Company and Wockhardt. On the other hand, the top losers were JSW Energy, Just Dial and Asian Paints. In the index options segment, maximum OI was being seen in the 8200-8500 calls and 7800-8100 puts. In today's session, while the traders preferred to exit 7500 put, heavy buildup was seen in the 8200 put. On the other hand, traders exited from 8500 Call, while 8400 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 6.40% and reached 17.23. The 50-share CNX Nifty was down by 34.90 points or 0.42% to settle at 8,260.55.  Nifty October 2015 futures closed at 8263.60 on Monday at a premium of 3.05 points over spot closing of 8,260.55, while Nifty November 2015 futures ended at 8299.75 at a premium of 39.20 points over spot closing. Nifty October futures saw contraction of 1.64 million (mn) units, taking the total outstanding open interest (OI) to 16.88 million (mn) units. The near month derivatives contract will expire on October 29, 2015.  

From the most active contracts, SBI Bank October 2015 futures traded at discount of 1.10 points at 250.30 compared with spot closing of 251.40. The number of contracts traded were 38,070.   

Aixs Bank October 2015 futures traded at a discount of 0.20 points at 521.05 compared with spot closing of 521.25. The number of contracts traded were 31,317.      

HDFC Bank October 2015 futures traded at a premium of 1.65 points at 1102.65 compared with spot closing of 1,101.00. The number of contracts traded were 30,336.       

Reliance October 2015 futures traded at a premium of 2.50 points at 944.65 compared with spot closing of 942.15. The number of contracts traded were 36,921.  

Yes Bank October 2015 futures traded at a premium of 0.65 points at 746.05 compared with spot closing of 745.40. The number of contracts traded were 26,830.    

Among Nifty calls, 8300 SP from the October month expiry was the most active call with an addition of 0.19 million open interests.  Among Nifty puts, 8300 SP from the October month expiry was the most active put with an addition of 0.18 million open interests. The maximum OI outstanding for Calls was at 8300 SP (5.70 mn) and that for Puts was at 8200 SP (6.14 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8313.88--- Pivot Point 8282.97--- Support --- 8229.63.

The Nifty Put Call Ratio (PCR) finally stood at 1.35 for October month contract.  The top five scrips with highest PCR on OI were ZEEL (1.43), Lupin (1.41), Tata Motors (1.27), STAR (1.18) and Hero MotoCorp (1.17).   

Among most active underlying, HDFC witnessed an addition of 0.28 million of Open Interest in the October month futures contract, followed by Reliance Industries witnessing a contraction of 1.22 million of Open Interest in the October month contract; State Bank of India witnessed a contraction of 7.86 million of Open Interest in the October month contract, Maruti Suzuki India witnessed a contraction of 0.11 million of Open Interest in the October month contract and Axis Bank witnessed a contraction of 4.33 million units of Open Interest in the October month's future contract.