Nifty ends below 7800 mark on weak economic data

The fifty stock index -- Nifty -- snapped a distressing session with cut of over half a percent on the last trading session of the week as investors offloaded their positions on disappointing macro data and weak trend in Asian markets. Sentiments remained down-beat on report that foreign institutional investors have been net sellers of Indian equities for $273.87 million in November so far. Further, shares of interest rate-sensitive sectors such as banking, real estate and autos ended lower on the back of disappointing macroeconomic numbers as investors become cautious and focus on the tone of the central bank at a time when industrial growth fell to a four-month in September and the CPI inflation for October rose to five per cent - the highest in four months. On the global front, Asian markets ended mostly in red as commodity prices plunged to multi-year lows on worries that softer global growth may exacerbate the supply glut, while US Federal Reserve officials kept beating the drum for a rate hike next month. Crude prices hit two-and-a-half-month lows after the U.S. government reported a stockpile build four times above market expectations, while gold tumbled to its lowest level since 2010, depressed by expectations that the Federal Reserve is on track for a rate liftoff in December for the first time in nearly a decade. Furthermore, European shares fell in early trade, extending losses amid expectations of a U.S. rate increase next month but with the declines capped by a takeover approach for Syngenta and positive earnings updates.

Back home, the benchmark got off to a weak start as investors turned cautious after disappointing macro-economic data that suggests a slump in the September factory output numbers and a sharp rise in the October inflation numbers. According to data released by government on Thursday, annual consumer price inflation edged up to 5.0 per cent in October, up for the third straight month, compared with 4.41 per cent a month ago, while Annual industrial output grew at a slower-than-expected pace of 3.6 per cent in September, dampened by a slower expansion in the mining sector. Thereafter, the key index failed to show any kind of fervor due to lack of encouraging leads. Further, investors also failed to draw any sense of relief with the International Monetary Fund’s (IMF’s) statement that India’s growth will benefit from recent policy reforms, a consequent pickup in investment, and lower commodity prices. Traders were seen piling position in Metal and Consumer Durables stocks, while selling was witnessed in Capital Goods, Auto and FMCG sector stocks.

The top gainers from the F&O segment were Jindal Steel & Power, CESC and Tata Motors. On the other hand, the top losers were Indiabulls Housing Finance, Reliance Communications and Oil India. In the index options segment, maximum OI was being seen in the 8000-8400 calls and 7500-7900 puts. In today's session, while the traders preferred to exit 7900 put, heavy buildup was seen in the 7500 put. On the other hand, traders exited from 8500 Call, while 8000 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 4.42% and reached 17.65. The 50-share Nifty was down by 62.75 points or 0.80% to settle at 7,762.25.

Nifty November 2015 futures closed at 7774.30 on Friday at a premium of 12.05 points over spot closing of 7762.25, while Nifty December 2015 futures ended at 7818.75 at a premium of 56.50 points over spot closing. Nifty November futures saw contraction of 0.08 million (mn) units, taking the total outstanding open interest (OI) to 17.55 million (mn) units. The near month derivatives contract will expire on November 26, 2015.  

From the most active contracts, ICICI Bank November 2015 futures traded at discount of 0.85 points at 262.15 compared with spot closing of 263.00. The number of contracts traded were 11,344.    

SBI November 2015 futures traded at a premium of 0.90 points at 241.20 compared with spot closing of 240.30. The number of contracts traded were 11,399.       

Axis Bank November 2015 futures traded at a premium of 1.30 points at 485.80 compared with spot closing of 484.50. The number of contracts traded were 17,519. 

Tata Motors November 2015 futures traded at a discount of 1.65 points at 402.00 compared with spot closing of 403.65. The number of contracts traded were 11,223.      

Yes Bank November 2015 futures traded at a premium of 1.95 points at 740.95 compared with spot closing of 739.00. The number of contracts traded were 10,383.    

Among Nifty calls, 7800 SP from the November month expiry was the most active call with an addition of 0.35 million open interests.  Among Nifty puts, 7700 SP from the November month expiry was the most active put with an addition of 0.34 million open interests. The maximum OI outstanding for Calls was at 8200 SP (7.46 mn) and that for Puts was at 7700 SP (5.89 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7781.27 --- Pivot Point 7756.08 --- Support --- 7737.07.

The Nifty Put Call Ratio (PCR) finally stood at 0.70 for November month contract.  The top five scrips with highest PCR on OI were STAR (1.86), Bank of Baroda (1.35), Hexaware (1.23), Titan Company (1.19) and Glenmark Pharmaceuticals (1.16).   

Among most active underlying, Maruti Suzuki India witnessed an addition of 0.10 million of Open Interest in the November month futures contract, followed by Indiabulls Housing Finance witnessing an addition of 2.12 million of Open Interest in the November month contract; Axis Bank witnessed an addition of 0.08 million of Open Interest in the November month contract, Dr. Reddy's Laboratories witnessed an addition of 0.07 million of Open Interest in the November month contract and Wockhardt witnessed an addition of 0.22 million units of Open Interest in the November month's future contract.