Nifty skids lower for second day in a row; ends below 7900 level

The fifty stock index -- Nifty -- continued its southward journey for second consecutive day on Thursday and finished the choppy day of trade with cut of around a percent on account of sharp selling in frontline blue chip counters. Sentiments remained down-beat from early part of the session on the report that India’s services activity barely expanded marking its slowest pace in five months. The Nikkei/Markit Services Purchasing Managers’ Index (PMI) fell sharply to 50.1 in November from October’s eight-month high of 53.2. On the global front, Asian markets ended mostly in red as investors turned jittery after crude oil prices fell below the $40 a barrel mark overnight and hawkish comments from Federal Reserve Chair Janet Yellen reinforced the case for an interest rate hike later this month.

Back home, after getting a weak start, Indian benchmark Nifty traded in small range near 7900 mark for most part of the session, however sharp selling in final hour of trade dragged the index to lowest point of the session to end with loss of about one percent. Sentiments remained subdued on the report that foreign investors, who account for little under 24 per cent of Indian stock ownership, were net sellers in November, offloading over Rs 7,000 crore worth of shares. Besides, a weak trend in other Asian markets, tracking overnight sell-off in the US markets on plummeting oil prices also dampened the sentiment. Investors failed to draw any sense of relief from report that Cabinet has given ex-post-facto approval to the easing of foreign direct investment (FDI) policy in 15 sectors that was approved by the Prime Minister Narendra Modi last month. Meanwhile, falls were led by stocks which have a higher percentage of foreign ownership, on worries that a hike in US interest rates would lead to capital outflows. Shares of some auto and IT services companies have declined as floods hit normal business activities in Tamil Nadu.

The top gainers from the F&O segment were TV18 Broadcast, Reliance Communications and Jain Irrigation Systems. On the other hand, the top losers were Just Dial, Voltas and Apollo Tyres. In the index options segment, maximum OI was being seen in the 8000-8500 calls and 7500-8000 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 3.66% and reached 16.05. The 50-share Nifty was down by 67.20 points or 0.85% to settle at 7,864.15. 

Nifty December 2015 futures closed at 7890.80 on Thursday at a premium of 26.65 points over spot closing of 7,864.15, while Nifty January 2016 futures ended at 7929.45 at a premium of 65.30 points over spot closing. Nifty December futures saw addition of 0.03 million (mn) units, taking the total outstanding open interest (OI) to 19.37 million (mn) units. The near month derivatives contract will expire on December 31, 2015.    

From the most active contracts, Reliance Communications December 2015 futures traded at a premium of 0.50 points at 84.10 compared with spot closing of 83.60. The number of contracts traded were 18,372.        

SBI Bank December 2015 futures traded at a premium of 0.10 points at 241.60 compared with spot closing of 241.50. The number of contracts traded were 10,637.     

ICICI Bank December 2015 futures traded at a discount of 0.50 points at 267.25 compared with spot closing of 265.75. The number of contracts traded were 9,053.        

Axis Bank December 2015 futures traded at a premium of 1.85 points at 464.65 compared with spot closing of 462.80. The number of contracts traded were 14,919.           

Tata Steel December 2015 futures traded at a premium of 0.60 points at 240.50 compared with spot closing of 239.90. The number of contracts traded were 11,436.   

Among Nifty calls, 8000 SP from the December month expiry was the most active call with an addition of 0.48 million open interests. Among Nifty puts, 7800 SP from the December month expiry was the most active put with an addition of 0.15 million open interests. The maximum OI outstanding for Calls was at 8500 SP (4.41 mn) and that for Puts was at 8000 SP (4.54 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7899.87 --- Pivot Point 7876.58 --- Support --- 7840.87.

The Nifty Put Call Ratio (PCR) finally stood at 0.85 for December month contract.  The top five scrips with highest PCR on OI were UCO Bank (1.90), JSW Steel (1.26), STAR (1.24), ACC (1.18) and GAIL (1.18).   

Among most active underlying, Reliance Communications witnessed an addition of 4.34 million of Open Interest in the December month futures contract, followed by Reliance Industries witnessing a contraction of 0.26 million of Open Interest in the December month contract; Reliance Capital witnessed an addition of 0.38 million of Open Interest in the December month contract, Axis Bank witnessed a contraction of 0.91 million of Open Interest in the December month contract and Tata Steel witnessed a contraction of 0.74 million units of Open Interest in the December month's future contract.