Bears return with a vengeance; Nifty down 1.35 percent

Bears struck back with on Wednesday and Nifty ended the day’s trade with a fall of over 105 points breaching its crucial 7750 level, as lingering concerns about earnings and the worsening global risk environment hit blue chips across the board. Investor around the world remained cautious after the US economic data released yesterday showed some positivity in consumer prices as well as manufacturing data thus providing room for a December rate hike. Sentiments weakened further on the report that foreign institutional investors (FIIs) have been net sellers of over Rs 5,000 crore worth equities so far this month.

On the global front, Asian markets ended mostly in red as copper prices tumbled and another bomb scare in Europe hurt risk appetites, while bets that the Federal Reserve remains on track for a rate hike bolstered the dollar. Further, European shares fell in early trade, retreating back from solid gains made in the previous session, as a new fall in the price of copper caused mining stocks to lose ground.

Back home, after trading with moderate cuts through the first half, the key gauge suffered a setback in afternoon trades as sudden profit booking emerged in the local markets immediately after a somber European market opening. Thereafter, the index barely showed any signs of stabilizing as the downward drift halted only with the session’s close and after suffering gargantuan losses. Sentiments remained subdued on the report India's exports declined for the eleventh month running in October, highlighting the stiff competition faced by the country in a weak global economy. Depreciation in Indian rupee too dampened sentiments. The rupee depreciated by 14 paise to 66.17 against the dollar at the Interbank Foreign Exchange on buying of the US currency by importers. Meanwhile, metal stocks were under pressure amid a crash in global commodity prices. Among banking stocks, selling pressure was visible in private lenders Axis Bank and ICICI Bank, and in public sector lender State Bank of India. IT majors like Infosys and TCS were the top losers amid a weakening rupee and concerns of H1-B visa issues. However, shares of Indian sugar companies continued rising on report that Government may consider subsidy for sugar cane farmers. Finally, Nifty ended the day’s trade with a cut of over a percentage point near its intraday low.

The top gainers from the F&O segment were GMR Infrastructure, Marico and Idea Cellular. On the other hand, the top losers were Hindalco Industries, Hindustan Zinc and IDBI Bank. In the index options segment, maximum OI was being seen in the 7900-8300 calls and 7500-7900 puts. In today's session, while the traders preferred to exit 7800 put, heavy buildup was seen in the 7500 put. On the other hand, traders exited from 8300 Call, while 7800 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 2.61% and reached 17.41. The 50-share Nifty was down by 105.75 points or 1.35% to settle at 7,731.80. 

Nifty November 2015 futures closed at 7731.95 on Wednesday at a premium of 0.15 points over spot closing of 7,731.80, while Nifty December 2015 futures ended at 7773.90 at a premium of 42.10 points over spot closing. Nifty November futures saw addition of 0.65 million (mn) units, taking the total outstanding open interest (OI) to 17.64 million (mn) units. The near month derivatives contract will expire on November 26, 2015.  

From the most active contracts, SBI November 2015 futures traded at a premium of 0.30 points at 240.75 compared with spot closing of 240.45. The number of contracts traded were 16,034.      

ICICI Bank November 2015 futures traded at a discount of 0.25 points at 260.20 compared with spot closing of 260.45. The number of contracts traded were 12,548.          

Axis Bank November 2015 futures traded at a premium of 2.05 points at 465.05 compared with spot closing of 463.00. The number of contracts traded were 11,865.    

Tata Motors November 2015 futures traded at a discount of 1.25 points at 405.05 compared with spot closing of 406.30. The number of contracts traded were 10,510.        

Yes Bank November 2015 futures traded at a premium of 2.15 points at 724.05 compared with spot closing of 721.90. The number of contracts traded were 11,374.  

Among Nifty calls, 7900 SP from the November month expiry was the most active call with an addition of 0.68 million open interests.  Among Nifty puts, 7700 SP from the November month expiry was the most active put with an addition of 0.40 million open interests. The maximum OI outstanding for Calls was at 8000 SP (7.05 mn) and that for Puts was at 7700 SP (6.07 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7808.45--- Pivot Point 7766.75--- Support --- 7690.10.

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 (1.66), Titan Company (1.40), Bank of Baroda (1.27), BEML (1.20) and Hexaware (1.18).   

Among most active underlying, State Bank of India witnessed an addition of 0.71 million of Open Interest in the November month futures contract, followed by Infosys witnessing an addition of 0.22 million of Open Interest in the November month contract; Maruti Suzuki India witnessed a contraction of 0.03 million of Open Interest in the November month contract, Larsen & Toubro witnessed a contraction of 0.53 million of Open Interest in the November month contract and Axis Bank witnessed an addition of 0.16 million units of Open Interest in the November month's future contract.