Nifty skids lower for five day in a row

The fifty stock index -- Nifty -- ended the last session of Samvat Year 2071 on a dismal note, as traders turned cautious in the truncated week while worries over foreign fund outflows amid prospects of interest rate hike by the US Fed also dampened sentiment. Besides, investors remained concerned as the big loss of the BJP in the Bihar election has raised concerns that the government will struggle to pass policy reforms. On the global front, Asian markets ended mostly in red as the spectre of higher borrowing costs in the United States and slower global economic growth prompted investors to trim their exposure to riskier assets. Further, the stock markets in the Europe turned lower, undoing the positive start to trading as mining shares took a hit following weak China data.

Back home, the benchmark got off to a sedate opening tracking the dismal leads prevailing in Asian markets on continued concerns about the state of the global economy and potential US interest rate hikes. Sentiments remained dismal on the report that Inflation in India probably edged up in October as food prices climbed while weak demand is expected to have hurt factory output growth the month before.  Investors failed to draw any sense of relief with the Finance Minister Arun Jaitley’s statement that the defeat of the coalition NDA in Bihar will not have any impact on investor sentiment and the economic reforms will continue.  Heavy selling pressure was seen in Oil & Gas, Metal and Realty sectors, while mild buying was observed in Auto sectors. The selling pressure accentuated in the mid afternoon trades as investors took to across the board risk aversion. Thereafter, the key index barely managed to show signs of stabilizing in the session as the downward drift halted only with the session’s close after suffering gargantuan losses. Finally the NSE’s 50-share broadly followed index Nifty, suffered a nasty hundred point laceration to settle below the crucial 7800 support level. Meanwhile, stock markets will remain closed on Wednesday and Thursday for Diwali Laxmi pujan and Diwali Balipratipada, except for a one-hour Muhurat trading on Wednesday evening.

The top gainers from the F&O segment were IFCI, IDBI Bank and TVS Motor Company. On the other hand, the top losers were Reliance Communications, Hindustan Zinc and Hindustan Petroleum Corporation. In the index options segment, maximum OI was being seen in the 8100-8500 calls and 7600-8000 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 8400 Call, while 8200 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.26% and reached 16.82. The 50-share Nifty was down by 131.85 points or 1.67% to settle at 7,783.35. Nifty November 2015 futures closed at 7802.50 on Tuesday at a premium of 19.15 points over spot closing of 7783.35, while Nifty December 2015 futures ended at 7848.15 at a premium of 64.80 points over spot closing. Nifty November futures saw contraction of 0.20 million (mn) units, taking the total outstanding open interest (OI) to 17.37 million (mn) units. The near month derivatives contract will expire on November 26, 2015.  

From the most active contracts, Dr Reddy’s November 2015 futures traded at premium of 6.95 points at 3337.65 compared with spot closing of 3330.70. The number of contracts traded were 21,776.    

SBI November 2015 futures traded at a premium of 0.95 points at 242.15 compared with spot closing of 241.20. The number of contracts traded were 16,006.       

Maruti Suzuki November 2015 futures traded at a discount of 14.55 points at 4698.15 compared with spot closing of 4712.70. The number of contracts traded were 15,974.    

Tata Motors November 2015 futures traded at a discount of 1.20 points at 406.25 compared with spot closing of 407.45. The number of contracts traded were 15,900.      

Axis Bank November 2015 futures traded at a premium of 0.70 points at 469.05 compared with spot closing of 468.35. The number of contracts traded were 12,689. 

Among Nifty calls, 8000 SP from the November month expiry was the most active call with an addition of 1.62 million open interests.  Among Nifty puts, 7800 SP from the November month expiry was the most active put with an addition of 0.74 million open interests. The maximum OI outstanding for Calls was at 8200 SP (7.18 mn) and that for Puts was at 7600 SP (5.36 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7854.68--- Pivot Point 7813.77--- Support --- 7742.43.

The Nifty Put Call Ratio (PCR) finally stood at 0.74 for November month contract.  The top five scrips with highest PCR on OI were STAR (1.76), Hexaware (1.31), Bank of Baroda (1.30), CESC (1.27) and Titan Company (1.16).   

Among most active underlying, Dr. Reddy's Laboratories witnessed an addition of 0.19 million of Open Interest in the November month futures contract, followed by Maruti Suzuki India witnessing an addition of 0.18 million of Open Interest in the November month contract; Tata Motors witnessed an addition of 0.39 million of Open Interest in the November month contract, State Bank of India witnessed a contraction of 0.38 million of Open Interest in the November month contract and Reliance Industries  witnessed an addition of 1.04 million units of Open Interest in the November month's future contract.