Nifty skids lower for fourth day in a row; ends below 8150 mark

Indian benchmark Nifty declined for a fourth consecutive session on Thursday, recording their lowest close in little over two weeks, as the US Federal Reserve revived market expectations that it may yet raise interest rates by the end of the year. Among other factors, concerns over corporate earnings so far, rupee’s depreciation by 27 paise against the dollar and the expiry of October derivatives contracts also weighed on Sentiments. On the global front, Asian equity markets ended in red, barring Shanghai Composite and Nikkei 225 which closed with marginal gains. The Fed kept rates unchanged as expected on Wednesday, but surprised investors with a direct reference putting in play a rate hike at its next policy meeting in December. Besides, unexpectedly strong Japanese industrial output data dimmed expectations of additional easing from the Bank of Japan.  European shares surrendered early gains on Thursday after disappointing updates from companies like Deutsche Bank, Saint-Gobain and Barclays and a sharp drop in mining shares.

Back home, the benchmark got off to a weak start as participants cut down bets in view of the October series expiry in the derivatives segment amid weak Asian cues. Thereafter, the key index failed to show any kind of fervor due to lack of encouraging leads. The sentiments came under pressure after the report that India Ratings has revised its GDP growth forecast for India to 7.5 per cent from earlier estimate of 7.7 per cent, for the current financial year. The downward revision in forecast is primarily due to the lower agricultural growth caused by a deficient rainfall. The key gauge suffered a setback in afternoon trades as sudden bouts of profit booking emerged in the local markets immediately after a somber European market opening. Telecom stocks came under pressure on the report that the Indian telecom watchdog's decision to impose a penalty of Re.1 for dropped calls from January 1 next year will stand as of now. The PSU oil marketing companies too suffered sharp cuts after the international crude prices surged overnight, though there was some decline in today’s trade in prices after Pemex, the national oil company of Mexico, said it received permission to swap crude oil with the US, possibly ending the US ban on exporting crude. Finally, Nifty ended the trade with a cut of over half a percent near its intraday low breaching its psychological 8,150 mark.

The domestic index CNX Nifty finished the September F&O series with a gain of 243 points or 3.09%. Many traders rolled over positions in the futures & options (F&O) segment from the October 2015 series to November 2015 series. Sectorally, infrastructure, metals and FMCG stocks have witnessed high rollover of positions while stocks from the cement, media and oil & gas space have witnessed relatively low rolls into the November series. Meanwhile, the top gainers from the F&O segment were UCO Bank, IDBI Bank and Motherson Sumi Systems. On the other hand, the top losers were Just Dial, Bharat Forge and Bharat Heavy Electricals.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 0.54% and reached 17.58. The 50-share CNX Nifty was down by 59.45 points or 0.73% to settle at 8,111.75.

Among Nifty calls, 8200 SP from the October month expiry was the most active call with an addition of 4.29 million open interests.  Among Nifty puts, 8100 SP from the October month expiry was the most active put with a contraction of 3.34 million open interests. The maximum OI outstanding for Calls was at 8200 SP (8.07 mn) and that for Puts was at 8100 SP (7.70 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8161.57 --- Pivot Point 8129.78 --- Support --- 8079.97.

The Nifty Put Call Ratio (PCR) finally stood at 1.06 for October month contract.  The top five scrips with highest PCR on OI were Dr. Reddys Laboratories (1.90), Just Dial (1.66), Aurobindo Pharma (1.50), Tata Motors (1.37) and STAR (1.30).   

Among most active underlying, Dr. Reddy's Laboratories witnessed a contraction of 0.17 million of Open Interest in the October month futures contract, followed by Yes Bank witnessing an addition of 0.32 million of Open Interest in the October month contract; Axis Bank witnessed an addition of 1.11 million of Open Interest in the October month contract, Maruti Suzuki India witnessed a contraction of 0.15 million of Open Interest in the October month contract and Tata Motors witnessed an addition of 5.71 million units of Open Interest in the October month's future contract.