Nifty ends below 7950 mark; weighed down by IT and tech stocks

Lack of any positive trigger coupled with negative macro economic data points and caution over the upcoming US rate hike - leading the local benchmark, Nifty to close with cut of 23 points or 0.30 percent on Wednesday's trade. Besides, depreciation in rupee against dollar also weighed down sentiments. Indian rupee depreciated by 10 paise to 66.60 against the American currency in afternoon trade on buying of the US currency by importers.  On the global front, Asian markets ended mostly in red on Wednesday as investors turned cautious after downbeat U.S. manufacturing data raised questions about how aggressive the Federal Reserve would be when hiking interest rates, while the dollar retreated from 8-1/2-month highs. However, Chinese markets rallied on speculation that Beijing was about to announce a new incentive to boost the country's sagging property market. European shares rose in early trade, buoyed by expectations of new economic stimulus measures from the European Central Bank (ECB), while healthcare stocks outperformed on some bullish broker recommendations.

Back home, after getting positive start, Indian benchmark Nifty slipped into negative territory in late morning trade on absence of positive triggers which could take the markets higher and profit booking in frontline line blue-chip stocks. The index continued its weakness for rest of the session and ended with the cut of three tens of a percent. Sentiments remained down-beat with an RBI-sponsored survey of professional forecasters pointing that the retail inflation is likely to rise to 5.5 per cent in the last quarter of this fiscal and thereafter may moderate to 5.2 per cent by September 2016. Though, the forecasters expect real Gross Value Added at basic price (GVA) to increase by 7.4 per cent in 2015-16. However, losses remained capped on report that foreign direct investment (FDI) in the country grew by 13 percent to $16.63 billion during the April-September period of the current fiscal. Meanwhile, banking stocks came under pressure after RBI decided to announce methodology to calculate base rates in order to make sure that banks pass rate cut benefit to the customers. Some software service exporters and auto firms such as TVS Motor have declined as heavy flooding in the southern state of Tamil Nadu shut down factories and paralysed the airport. On the other hand, metal stocks remained on buyers’ radar on the report that the government may soon announce steps to curb steel imports. Further, Aviation stocks also witnessed a strong buying interest after jet fuel, or ATF, prices were cut on Tuesday by 1.2%.

The top gainers from the F&O segment were GMR Infrastructure, JSW Steel and Apollo Hospitals Enterprise. On the other hand, the top losers were TVS Motor Company, Motherson Sumi Systems and UCO Bank. In the index options segment, maximum OI was being seen in the 8000-8500 calls and 7500-8000 puts. In today's session, while the traders preferred to exit 7500 put, heavy buildup was seen in the 7600 put. On the other hand, traders exited from 7800 Call, while 8000 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 0.94% and reached 15.48. The 50-share Nifty was down by 23.55 points or 0.30% to settle at 7931.35. 

Nifty December 2015 futures closed at 7962.90 on Wednesday at a premium of 31.55 points over spot closing of 7,931.35, while Nifty January 2016 futures ended at 7999.25 at a premium of 67.90 points over spot closing. Nifty December futures saw contraction of 0.16 million (mn) units, taking the total outstanding open interest (OI) to 19.34 million (mn) units. The near month derivatives contract will expire on December 31, 2015.    

From the most active contracts, SBI December 2015 futures traded at a premium of 0.80 points at 245.35 compared with spot closing of 244.55. The number of contracts traded were 13,380.        

ICICI Bank December 2015 futures traded at a premium of 1.20 points at 271.35 compared with spot closing of 270.15. The number of contracts traded were 8,543.     

Axis Bank December 2015 futures traded at a premium of 3.65 points at 462.45 compared with spot closing of 458.80. The number of contracts traded were 9,761.        

Tata Steel December 2015 futures traded at a premium of 0.95 points at 244.35 compared with spot closing of 243.40. The number of contracts traded were 14,913.           

Tata Motors December 2015 futures traded at a premium of 2.90 points at 414.45 compared with spot closing of 411.55. The number of contracts traded were 10,623. 

Among Nifty calls, 8000 SP from the December month expiry was the most active call with an addition of 0.59 million open interests. Among Nifty puts, 7900 SP from the December month expiry was the most active put with an addition of 0.04 million open interests. The maximum OI outstanding for Calls was at 8500 SP (4.45 mn) and that for Puts was at 8000 SP (4.62 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7970.17--- Pivot Point 7940.48--- Support --- 7901.67.

The Nifty Put Call Ratio (PCR) finally stood at 0.94 for December month contract.  The top five scrips with highest PCR on OI were STAR (1.33), JSW Steel (1.26), SAIL (1.26), GAIL (1.26) and ACC (1.13).   

Among most active underlying, Maruti Suzuki India witnessed an addition of 0.11 million of Open Interest in the December month futures contract, followed by Tata Steel witnessing a contraction of 0.25 million of Open Interest in the December month contract; State Bank of India witnessed an addition of 3.26 million of Open Interest in the December month contract, Tata Motors witnessed an addition of 1.15 million of Open Interest in the December month contract and Reliance Industries witnessed a contraction of 0.01 million units of Open Interest in the December month's future contract.