Nifty wipes off day’s gains; ends below 8050 mark

The fifty stock index -- Nifty -- ended the session on a disappointing note amid a volatile trading session as investors booked profits in Index heavyweights at higher attractive valuations. Though, the index opened on a positive note tracking strong global cues but, it erased all the early gains and turned red as investors turned caution over the outcome of Bihar election and disappointment over Q2 corporate earnings by some blue-chip companies. Besides, foreign institutional investors (FIIs) have sold in four out of the previous seven sessions, depriving markets of momentum, after they had been heavy net buyers in October. On the global front, European shares rose in early trade, although Germany's blue-chip index sharply underperformed after a scandal at carmaker Volkswagen widened. Further, Japanese and Chinese stocks led Asian markets ended higher, helped by economy-friendly comments from China's President Xi Jinping, while on Wall Street, a rise in big tech and energy firms helped the Nasdaq 100 to close at a record high.

Back home, the benchmark got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. Sentiments got some support with India’s services sector activity touched an eight-month high in October driven by a significant rise in new business orders even as growth in manufacturing output eased. The Nikkei/Markit Services Purchasing Managers' Index rose to 53.2 in October from September's 51.3, marking a fourth month above the 50-level that separates growth from contraction. However, the index failed to capitalize on the early momentum and slipped to lower levels as turned cautious on global growth concerns as a survey in Europe showed euro zone business growth remained tepid in October, with the European Central Bank's massive stimulus program having little apparent impact on economic activity or price pressures. The frontline index kept losing momentum through the session and finally dipped into the negative terrain in the last leg of trade. Traders were seen piling position in Auto, PSU and Metal stocks, while selling was witnessed in IT, Banking and TECK sector stocks. Finally, Nifty ended the session below its crucial 8,050 mark with a cut of twenty points or 0.25 percent.

The top gainers from the F&O segment were Tata Motors, Jain Irrigation Systems and United Breweries. On the other hand, the top losers were Adani Enterprises, CEAT and Mcleod Russel India. 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 7600 put, heavy buildup was seen in the 7800 put. On the other hand, traders exited from 8000 Call, while 8400 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.02% and reached 19.35. The 50-share CNX Nifty was down by 20.50 points or 0.25% to settle at 8,040.20. Nifty November 2015 futures closed at 8070.05 on Wednesday at a premium of 29.85 points over spot closing of 8,040.20, while Nifty December 2015 futures ended at 8117.00 at a premium of 76.80 points over spot closing. Nifty November futures saw contraction of 0.30 million (mn) units, taking the total outstanding open interest (OI) to 18.71 million (mn) units. The near month derivatives contract will expire on November 26, 2015.  

From the most active contracts, Ashok Leyland November 2015 futures traded at discount of 0.35 points at 92.10 compared with spot closing of 92.45. The number of contracts traded were 9,514.    

SBI Bank November 2015 futures traded at a premium of 0.40 points at 239.25 compared with spot closing of 238.85. The number of contracts traded were 10,975.      

ICICI Bank November 2015 futures traded at a premium of 1.05 points at 274.45 compared with spot closing of 273.40. The number of contracts traded were 11,298.    

DLF November 2015 futures traded at a discount of 0.05 points at 122.55 compared with spot closing of 122.60. The number of contracts traded were 8,447.    

Axis Bank November 2015 futures traded at a premium of 2.65 points at 474.35 compared with spot closing of 471.70. The number of contracts traded were 9,738.

Among Nifty calls, 8300 SP from the November month expiry was the most active call with an addition of 0.60 million open interests.  Among Nifty puts, 8000 SP from the November month expiry was the most active put with a contraction of 0.90 million open interests. The maximum OI outstanding for Calls was at 8200 SP (0.24 mn) and that for Puts was at 8000 SP (0.24 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8095.10--- Pivot Point 8061.20--- Support --- 8006.30.

The Nifty Put Call Ratio (PCR) finally stood at 1 for November month contract.  The top five scrips with highest PCR on OI were STAR (2.46), Shriram Transport Finance (1.52), Ajanta Pharma (1.33), Bata India (1.29) and Indian Overseas Bank (1.18).   

Among most active underlying, Tata Motors witnessed an addition of 1.62 million of Open Interest in the November month futures contract, followed by Ashok Leyland witnessing an addition of 5.64 million of Open Interest in the November month contract; Maruti Suzuki India witnessed an addition of 0.04 million of Open Interest in the November month contract, DLF witnessed an addition of 1.96 million of Open Interest in the November month contract and Canara Bank witnessed an addition of 1.34 million units of Open Interest in the November month's future contract.