Nifty skids lower for second day in a row; ends below 8250 level

The fifty stock index -- Nifty -- continued its southward journey for second consecutive day on Tuesday and finished the choppy day of trade with cut of three tens of a percent. Sentiment remained cautious ahead of the US Federal Reserve's two-day policy meet scheduled later in the day. Besides, Quarterly results and the expiry of monthly derivative contracts on Thursday also affected market sentiments. On the global front, Asian stock markets ended lower as investors awaited monetary policy announcements from central banks and the outcome of China's economic planning meeting. The Fed is widely expected to stand pat on interest rates, but markets will closely watch for any guidance on a possible move in December. Further, European stocks too declined in early trade, with lower oil prices and caution ahead of Wednesday’s Federal Reserve interest rate decision weighing on the markets. Disappointing quarterly earnings from the likes of BASF and Novartis and sluggish GDP figures from the U.K. also dampened investor sentiment.

Back home, after getting a weak start, Indian benchmark Nifty enlarged its losses in late morning deals as investors were largely remained influenced by the daunting sentiments prevailing in Asian markets. Thereafter, the key indices failed to show any kind of fervor due to lack of encouraging leads. However, mild short covering in final four of trade helped the index to ease some of its losses. Sentiments remained subdued with Minister of State for Finance Jayant Sinha’s statement that the government is keeping a close eye on inflation and is concerned about food prices, especially dal prices and are monitoring those prices very closely. Traders remained concerned with the repot that India's business confidence rose only slightly in October, despite a bigger-than-expected rate cut from the Reserve Bank of India (RBI), as worries about weak demand continues to impact sentiment. However, losses remained capped with Finance Minister Arun Jaitley’s statement that there is no cause for concern on fiscal deficit and the government will meet its target for the current fiscal despite certain challenges on the disinvestment front. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 724.51 crore on October 26, 2015. Meanwhile, selling pressure was seen in oil & gas stocks amid weak commodity prices. Global crude prices declined in early trade, extending losses into a third week. On the other hand, Aviation stocks were in limelight after IndiGo's Rs 3,000 crore IPO, which opened today, saw strong interest.

The top gainers from the F&O segment were TVS Motor Company, UPL and IRB Infrastructure Developers. On the other hand, the top losers were Lupin, ONGC and GAIL (India). In the index options segment, maximum OI was being seen in the 8200-8500 calls and 7800-8200 puts. In today's session, while the traders preferred to exit 8300 put, heavy buildup was seen in the 8250 put. On the other hand, traders exited from 8200 Call, while 8250 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 4.03% and reached 16.53. The 50-share CNX Nifty was down by 27.65 points or 0.33% to settle at 8,232.90. Nifty October 2015 futures closed at 8244.25 on Tuesday at a premium of 11.35 points over spot closing of 8,232.90, while Nifty November 2015 futures ended at 8279.95 at a premium of 47.05 points over spot closing. Nifty October futures saw contraction of 1.75 million (mn) units, taking the total outstanding open interest (OI) to 15.13 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 premium of 0.95 points at 249.35 compared with spot closing of 248.40. The number of contracts traded were 37,337.   

Aixs Bank October 2015 futures traded at a premium of 3.90 points at 521.50 compared with spot closing of 517.60. The number of contracts traded were 46,747.      

Tata Motors October 2015 futures traded at a premium of 0.20 points at 383.80 compared with spot closing of 383.60. The number of contracts traded were 33,690.       

HDFC Bank October 2015 futures traded at a premium of 2.70 points at 1112.70 compared with spot closing of 1,110.00. The number of contracts traded were 49,565.  

Reliance October 2015 futures traded at a premium of 1.35 points at 940.85 compared with spot closing of 939.50. The number of contracts traded were 26,909.      

Among Nifty calls, 8300 SP from the October month expiry was the most active call with a contraction of 0.63 million open interests.  Among Nifty puts, 8200 SP from the October month expiry was the most active put with a contraction of 0.89 million open interests. The maximum OI outstanding for Calls was at 8300 SP (4.78 mn) and that for Puts was at 8200 SP (4.93 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8244.22 --- Pivot Point 8230.63 --- Support --- 8219.32.

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 Lupin (1.41), ZEEL (1.35), Tata Motors (1.35), Aurobindo Pharma (1.29) and Tata Com (1.20).   

Among most active underlying, Maruti Suzuki India witnessed a contraction of 0.29 million of Open Interest in the October month futures contract, followed by Lupin witnessing a contraction of 0.46 million of Open Interest in the October month contract; Axis Bank witnessed a contraction of 1.84 million of Open Interest in the October month contract, HDFC Bank witnessed a contraction of 5.85 million of Open Interest in the October month contract and Dish TV India witnessed a contraction of 9.10 million units of Open Interest in the October month's future contract.