Nifty prolong the lull for second straight session; end with marginal losses

The fifty stock index -- Nifty -- prolonged the lull for second straight day and finished the session on a dull note, marginally below the neutral line as investors at large remained reluctant to build on long positions ahead of November futures and options expiry. Also, the winter session of the Parliament, which will begin on Thursday has kept market participants unnerved. The monsoon session of the Parliament was a complete washout and the key legislations such as Good and Services Tax (GST) Bill did not sail through. On the global front, Asian stock markets ended mostly in green, with investors treading cautiously following the weak cues overnight from Wall Street. Slumping commodity prices weighed on shares of resource companies. Raw materials such as copper and nickel have slid to multi-year lows on the subdued global economic outlook as well as the dollar's strength on rising expectations that the Federal Reserve will raise interest rates next month. European stock markets opened sharply lower Tuesday as jitters about instability in the Middle East intensified.

Back home, after getting a weak start, Indian benchmark Nifty recovered from day’s low and showed some strength in morning trades, on emergence of buying by funds and retail investors in select stocks. Sentiments got some support with Parliamentary Affairs Minister Venkaiah Naidu’s statement that the government is reaching out to the Opposition to bring it on board to ensure passage of the Constitution Amendment Bill for GST in the Winter Session. Thereafter, the index traded near neutral line for most part of the day’s trade, lacking any significant upside triggers as investors engaged themselves in few stocks ahead of the winter session of the Parliament. Markets remained under pressure owing to weakness in IT, capital goods, auto and select banking stocks. Steel companies also witnessed selling  pressure due to low demand and very low prices of commodities, which can leave either slender or no margin for producers. On the flip side, Oil and gas sector stocks extended their upmove after the crude prices in the global markets improved with Saudi Arabia pledging to work toward oil price stability and Qatar agreeing to waive $1 billion penalty on India for breaking a long-term LNG contract.

Meanwhile, volumes in derivatives have also taken a hit after India unveiled rules that raised the minimum contract size to Rs 5 lakh from Rs 2 lakh to reduce speculative trading among retail investors. The rules came into effect from the start of the current November contracts. The top gainers from the F&O segment were Reliance Communications, Jubilant Foodworks and GMR Infrastructure. On the other hand, the top losers were Bank of India, Bosch and JSW Energy. In the index options segment, maximum OI was being seen in the 7900-8200 calls and 7500-7900 puts. In today's session, while the traders preferred to exit 7700 put, heavy buildup was seen in the 7800 put. On the other hand, traders exited from 8000 Call, while 7900 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 4.86% and reached 16.24. The 50-share Nifty was down by 17.65 points or 0.22% to settle at 7,831.60. 

Nifty November 2015 futures closed at 7832.25 on Tuesday at a premium of 0.65 points over spot closing of 7,831.60, while Nifty December 2015 futures ended at 7864.75 at a premium of 33.15 points over spot closing. Nifty November futures saw contraction of 0.19 million (mn) units, taking the total outstanding open interest (OI) to 11.80 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 a premium of 0.20 points at 263.30 compared with spot closing of 263.10. The number of contracts traded were 16,194.       

SBI Bank November 2015 futures traded at a discount of 0.05 points at 241.55 compared with spot closing of 241.60. The number of contracts traded were 18,796.           

Axis Bank November 2015 futures traded at a premium of 0.65 points at 464.20 compared with spot closing of 463.55. The number of contracts traded were 18,630.    

HDFC November 2015 futures traded at a discount of 3.40 points at 1065.60 compared with spot closing of 1,069.00. The number of contracts traded were 25,173.        

Reliance November 2015 futures traded at a discount of 2.40 points at 966.70 compared with spot closing of 969.10. The number of contracts traded were 23,976.         Among Nifty calls, 7900 SP from the November month expiry was the most active call with an addition of 0.34 million open interests.  Among Nifty puts, 7800 SP from the November month expiry was the most active put with an addition of 0.51 million open interests. The maximum OI outstanding for Calls was at 8000 SP (5.92 mn) and that for Puts was at 7800 SP (4.75 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7863.75 --- Pivot Point 7838.20 --- Support --- 7806.05.

The Nifty Put Call Ratio (PCR) finally stood at 0.75 for November month contract.  The top five scrips with highest PCR on OI were Titan Company (1.93), STAR (1.66), IOB (1.46), BEML (1.40) and M&M (1.30).   

Among most active underlying, Reliance Industries witnessed a contraction of 5.84 million of Open Interest in the November month futures contract, followed by Maruti Suzuki India witnessing a contraction of 0.57 million of Open Interest in the November month contract; HDFC Bank witnessed a contraction of 7.43 million of Open Interest in the November month contract, State Bank of India witnessed a contraction of 11.22 million of Open Interest in the November month contract and Axis Bank witnessed a contraction of 19.90 million units of Open Interest in the November month's future contract.