Nifty snaps two days losing streak; ends above 7,850 mark

The November series futures and options contract expiry day turned out to be steady session for the Indian benchmark Nifty as the session lacked the flavor of high volatility which typically surfaces on F&O contract expiry day. Nevertheless, the frontline index end the session with healthy gains of over half a percent on hopes of passage of Goods & Services Tax (GST) Bill in Winter Session of Parliament. Some support also came with the report that India's crude oil import bill is likely to dip by 35 per cent to $73 billion this fiscal as global energy prices slumped on weak demand. On the global front, Asian markets ended mostly higher, as investor sentiments get some support with growing bets that the European Central Bank was gearing up to deliver further stimulus steps to keep the euro under pressure. However, Chinese stocks fell on worries a spate of IPO’s next week may drain funds from the secondary market, while the Hang Seng markets giving up the gains ended flat. Further, European shares edged higher in early deals, with a solid quarterly report from Infineon and gains among mining stocks on a rebound in metal prices providing support.

Back home, after getting cautious start, Indian benchmark Nifty showed some strength in late morning trade as investor were largely influenced with Prime Minister Narendra Modi assuring that he would “carefully hold” their hands and expressed hope that the GST regime would be rolled out in 2016. Hopes for the GST tax were rising as the idea of setting a relatively low rate for new Indian sales tax seemed to be gaining traction, as politicians of all stripes met to debate what would be the country's biggest tax reform since independence. Besides, a firming trend at other Asian bourses on easing tensions over Turkey’s shooting down of a Russian warplane and broadly upbeat US economic data also supported upsides. Thereafter, the index traded in a small range near 7850 mark for most part of the session as traders remained cautious ahead of the derivatives contracts expiry for the month of November. However, the market regained its momentum in the final hour of trade and finished the day gaining over half a percent on the index. On the sectoral front, Oil & gas sector stocks gained after the Power Minister Piyush Goyal said that the Government will approach global markets for long term gas supply pacts in view of low prices of the fuel. Gold and jewellary stocks rallied after the Commerce and Industry Minister Nirmala Sitharaman said that Finance Ministry should consider reduction of duty on gold imports, as it would help boosting exports of gems and jewellery sector. On the other hand, Liquor stocks came under selling pressure on reports that Bihar may ban sale of alcohol in the state effective April 1.

The domestic index CNX Nifty finished the November F&O series with a cut of over 610 points or seven percent. Many traders rolled over positions in the futures & options (F&O) segment from the November 2015 series to December 2015 series. Sectorally, telecom, metals and FMCG stocks have been witnessing high rollover of positions while stocks from the power, realty and finance space are witnessing relatively low rolls into the December series. The top gainers from the F&O segment were Reliance Power, Bharti Infratel and DLF. On the other hand, the top losers were Dr. Reddy's Laboratories, CEAT and Amara Raja Batteries. In the index options segment, maximum OI continues to be seen in the 7500-8000 calls and 8000-8500 puts indicating the expected trading range.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 2.72% and reached 16.68. The 50-share Nifty was up by 52.20 points or 0.67% to settle at 7,883.80. 

Nifty December 2015 futures closed at 7929.05 on Thursday at a premium of 45.25 points over spot closing of 7,883.80, while Nifty January 2016 futures ended at 7965.35 at a premium of 81.55 points over spot closing. Nifty December futures saw addition of 0.47 million (mn) units, taking the total outstanding open interest (OI) to 18.77 million (mn) units. The near month derivatives contract will expire on December 31, 2015.   From the most active contracts, ICICI Bank December 2015 futures traded at a premium of 0.75 points at 265.25 compared with spot closing of 264.50. The number of contracts traded were 22,568.        HDFC Bank December 2015 futures traded at a premium of 7.30 points at 1071.60 compared with spot closing of 1,064.30. The number of contracts traded were 19,601.     Sun Pharmaceuticals Industries December 2015 futures traded at a premium of 4.20 points at 741.00 compared with spot closing of 736.80. The number of contracts traded were 22,870.        Larsen & Toubro December 2015 futures traded at a premium of 4.85 points at 1341.85 compared with spot closing of 1,337.00. The number of contracts traded were 33,647.           Dr. Reddy's Laboratories December 2015 futures traded at a premium of 14.50 points at 3122.50 compared with spot closing of 3,108.00. The number of contracts traded were 19,644.            Among Nifty calls, 8200 SP from the December month expiry was the most active call with an addition of 0.57 million open interests.  Among Nifty puts, 7800 SP from the December month expiry was the most active put with an addition of 0.55 million open interests. The maximum OI outstanding for Calls was at 8200 SP (3.14 mn) and that for Puts was at 8000 SP (4.16 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7909.93--- Pivot Point 7870.97--- Support --- 7844.83.

The Nifty Put Call Ratio (PCR) finally stood at 0.93 for December month contract.  The top five scrips with highest PCR on OI were NCC (3), Glenmark Pharmaceuticals (2.07), Ambuja Cements (1.70), ACC (1.66) and SAIL (1.57).   

Among most active underlying, Dr. Reddy's Laboratories witnessed an addition of 0.95 million of Open Interest in the December month futures contract, followed by Larsen & Toubrowitnessing an addition of 4.88 million of Open Interest in the December month contract; Tata Motors witnessed an addition of 7.43 million of Open Interest in the December month contract, Reliance Industries witnessed an addition of 4.41 million of Open Interest in the December month contract and Maruti Suzuki India witnessed an addition of 0.62 million units of Open Interest in the December month's future contract.