Nifty trims losses; ends above 7900 mark

The fifty stock index -- Nifty -- commenced the fresh week on a depressing note as investors reacted nervously to the shock defeat of the BJP-led NDA alliance in the Bihar assembly polls. Besides, depreciation in Indian rupee too weighed down sentiments. The rupee was trading lower by 62 paise at 66.37 against the US dollar in early trade. However, investors got some support with finance minister Arun Jaitley’s statement, who attributing the NDA's defeat in Bihar assembly elections to ‘huge index of opposition unity’, said that it will not impact the economic reforms process. He also said that he hope that Bihar, which is a consuming state, would support the legislation the pending Goods and Services Tax (GST) bill in the parliament. On the global front, Asian markets ended mostly in red as a contraction in Chinese exports and worries over a likely Fed rate hike in December prompted investors to take quick profits. Chinese exports fell 6.9 percent year-over-year in October, bigger than a 3.7 percent fall seen in September, while imports plunged 18.8 percent from last year, leaving a record trade surplus of $61.6 billion. Selling in large-caps led by domestic investors sent Jakarta's composite index, the region's best performer last week, down 1.47% to a near one-week low. Further, European stocks dipped in early deals, with losses among auto sector stocks led by Renault and Continental mostly offset by gains among energy plays.

Back home, the benchmark Nifty got off to a somber opening, extending the downtrend for the fourth straight session as pessimistic sentiments prevailed across Asian markets. Sentiments turned bearish after BJP’s heavy defeat in Bihar state elections raised concerns about its ability to pass key reforms such as a goods and services tax, given the ruling coalition lacks a majority in the upper house of parliament. Disappointment over the pace of reforms has seen momentum wane for Indian shares, which are down about 14% since hitting a record high in early March. However, late short covering in blue-chip stocks ensured that local gauge goes home with relatively small losses. Sentiments got some support with the report that majority of India Inc feels optimistic about the state of the economy improving in the next two quarters at the industry and firm level, although the last six months have not witnessed much of a change at the ground level. Traders were seen piling position in Consumer Durables, Auto and FMCG stocks, while selling was witnessed in Realty, TECK and Capital Goods sector stocks.

The top gainers from the F&O segment were Havells India, Motherson Sumi Systems and Petronet LNG. On the other hand, the top losers were Sun Pharmaceuticals Industries, Adani Power and Housing Development and Infrastructure. In the index options segment, maximum OI was being seen in the 8200-8500 calls and 7700-8100 puts. In today's session, while the traders preferred to exit 8000 put, heavy buildup was seen in the 7800 put. On the other hand, traders exited from 8300 Call, while 8100 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 12.49% and reached 17.04. The 50-share Nifty was down by 39.10 points or 0.49% to settle at 7,915.20.

Among Nifty calls, 8000 SP from the November month expiry was the most active call with an addition of 0.47 million open interests.  Among Nifty puts, 7800 SP from the November month expiry was the most active put with an addition of 0.48 million open interests. The maximum OI outstanding for Calls was at 8200 SP (6.22 mn) and that for Puts was at 7800 SP (5.07 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7978.07 --- Pivot Point 7874.88 --- Support --- 7812.02.

The Nifty Put Call Ratio (PCR) finally stood at 0.82 for November month contract.  The top five scrips with highest PCR on OI were STAR (1.78), CESC (1.50), Bank of Baroda (1.29), Hexaware (1.21) and Titan Company (1.17).   

Among most active underlying, Tata Motors witnessed an addition of 3.74 million of Open Interest in the November month futures contract, followed by State Bank of India witnessing an addition of 1.26 million of Open Interest in the November month contract; Dr. Reddy's Laboratories witnessed an addition of 0.12 million of Open Interest in the November month contract, Maruti Suzuki India witnessed an addition of 0.30 million of Open Interest in the November month contract and Reliance Industries  witnessed an addition of 0.22 million units of Open Interest in the November month's future contract.