Nifty slips below 7800 mark on global cause

Nifty extended its downtrend for third consecutive day on Friday as investors around the world turned jittery after the much awaited European Central Bank (ECB) stimulus failed to meet the street expectations. Besides, weakness in rupee, which hit a more than two-year low against the greenback on strong demand for the American currency from banks and importers, also weighed on the sentiment. Sentiments remained subdued on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 611.43 crore on December 03, 2015. On the global front, all the Asian markets ended in red on Friday, with the Japan’s Nikkei declined by over two percent as the European Central Bank dashed expectations for greater stimulus, triggering a broader sell-off after the dollar weakened against the yen. Also, Fed chair Janet Yellen’s hawkish stance on the US economy thus reinforcing the case for an interest rate hike in December 2015 weighed on the sentiment across the bourses. All the major European Markets trading in red, with Germany’s DAX, UK’s FTSE 100 and France’s CAC declined by over three tens of a percent.

Back home, after getting a weak start, Indian benchmark Nifty traded near its psychological 7800 mark for most part of the session, though some recover witnessed in afternoon session, but final hour selling drag the index to lowest part of the session to end the day with loss of over a percent. Sentiments remained down-beat on Crisil’s latest report that India is unlikely to attain the ambitious target of doubling exports of goods and services to $900 billion by fiscal 2020 from $470 billion in FY15, mainly due to declining competitiveness of India Inc, infrastructure bottlenecks and labour market rigidity. Furthermore, the Asian Development Bank has revised its forecast downwards and projected India’s growth at 7.4 per cent in 2015, while S&P has maintained it at 7.4 per cent for the current fiscal year on concerns over the global slowdown, a weak monsoon, and stalled structural reforms. Investors failed draw any sense of relief from Finance Minister Arun Jaitley’s statement that the government will meet fiscal deficit target and maintain quality. Meanwhile, heavy selling witnessed in software and auto counters as heavy flooding in the southern state of Tamil Nadu shut down factories and paralysed the airport. However, some buying interest witnessed in stocks related to logistic showed some strength on report that the government and Opposition were finding some common ground on crucial elements of the much-awaited goods & services tax (GST).

The top gainers from the F&O segment were Sun Pharmaceuticals Industries, BEML and Hindustan Zinc. On the other hand, the top losers were GMR Infrastructure, Just Dial and TV18 Broadcast. In the index options segment, maximum OI was being seen in the 8200-8500 calls and 7500-8000 puts. In today's session, while the traders preferred to exit 7900 put, heavy buildup was seen in the 7700 put. On the other hand, traders exited from 8200 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 0.19% and reached 16.08. The 50-share Nifty was down by 82.25 points or 1.05% to settle at 7,781.90. 

Nifty December 2015 futures closed at 7820.50 on Friday at a premium of 38.60 points over spot closing of 7,781.90, while Nifty January 2016 futures ended at 7856.25 at a premium of 74.35 points over spot closing. Nifty December futures saw addition of 0.18 million (mn) units, taking the total outstanding open interest (OI) to 19.55 million (mn) units. The near month derivatives contract will expire on December 31, 2015.    

From the most active contracts, GMR Infrastructure December 2015 futures traded at a premium of 0.20 points at 15.60 compared with spot closing of 15.40. The number of contracts traded were 8,039.        

Reliance Communications December 2015 futures traded at a premium of 0.35 points at 81.45 compared with spot closing of 81.10. The number of contracts traded were 20,095.     

SBI Bank December 2015 futures traded at a discount of 0.70 points at 241.05 compared with spot closing of 241.75. The number of contracts traded were 11,349.        

Axis Bank December 2015 futures traded at a premium of 1.20 points at 463.25 compared with spot closing of 462.05. The number of contracts traded were 10,930.           

Tata Steel December 2015 futures traded at a premium of 0.55 points at 241.05 compared with spot closing of 240.50. The number of contracts traded were 9,009.    Among Nifty calls, 8000 SP from the December month expiry was the most active call with an addition of 0.34 million open interests. Among Nifty puts, 7800 SP from the December month expiry was the most active put with a contraction of 0.24 million open interests. The maximum OI outstanding for Calls was at 8200 SP (6.11 mn) and that for Puts was at 8000 SP (4.40 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7810.30 --- Pivot Point 7793.00 --- Support --- 7764.60.

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, Sun Pharmaceuticals Industries witnessed an addition of 1.63 million of Open Interest in the December month futures contract, followed by Reliance Communications witnessing a contraction of 2.36 million of Open Interest in the December month contract; Tata Motors witnessed a contraction of 0.44 million of Open Interest in the December month contract, GMR Infrastructure witnessed a contraction of 15.56 million of Open Interest in the December month contract and State Bank of India witnessed a contraction of 0.02 million units of Open Interest in the December month's future contract.