Nifty tumbles lower for fourth day in a row

Extending losses for the fourth straight session, the fifty share index Nifty ended the day 16 points lower, as cigarette maker ITC slumped about 7 per cent to log its biggest fall in nine months, while oil producers slipped after OPEC left output targets unchanged. Shares of ITC came under pressure after a Finance Ministry panel headed by Chief Economic Advisor Arvind Subramanian suggested 40% tax on demerit goods like tobacco, aerated beverages, pan masala and luxury cars. Further, lack of clarity on the passage of the crucial GST bill continued to keep investors on the sidelines, leading to selective selling pressure in particular sectors. On the global front, Asian markets ended mostly in green after Wall Street welcomed an upbeat US jobs report that suggested the world's biggest economy was well placed to handle an expected first increase in interest rates in almost a decade. European stock markets too rallied on Monday, boosted by optimism over the strength of the U.S. economy and dovish comments from European Central Bank President Mario Draghi.

Back home, the benchmark Nifty got off to a positive start as investors were largely influenced by the supportive leads from Asian markets. However, the index failed to capitalize on the early momentum and slipped to lower level in late morning session. Sentiments remained subdued on reports that foreign portfolio investors (FPIs) sold shares worth a net Rs 1,745.73 crore on December 04, 2015. The circumspect mood could be attributed to caution as the better-than-expected US employment data for November, paving the way for a rise in the interest rate mid-December. The index moved only sideways thereafter but touched intraday low in the late afternoon session due lack of significant upside cues. Investors kept a close eye on Goods and Services Tax (GST), which edged closer to approval on Friday after a government-appointed panel backed the lower rate and simpler structure that the opposition Congress party had demanded. In final hour of trade, the index recovered from the lows of the day but could not succeed in minimizing the all losses by the end of trading session. Investors drew some support with Fitch Ratings affirming India’s Long-Term Foreign- and Local-Currency Issuer Default Ratings at ‘BBB-‘, while the Outlooks on the Long-Term IDRs are Stable. Eventually, the index ended the day’s trade with a cut of over 16 points, holding its crucial 7,750 mark.

The top gainers from the F&O segment were GMR Infrastructure, Asian Paints and Voltas. On the other hand, the top losers were ITC, Sun TV Network and Cairn India. In the index options segment, maximum OI was being seen in the 8000-8500 calls and 7500-8000 puts. In today's session, the 7800, 7900 and 8000 Call strikes saw addition of 3.6, 5.81 and 5.89 lakh shares, respectively. On the other hand, 7600, 7500 and 7400 Put strikes saw addition of 2.22, 1.96 and 2 lakh shares, respectively.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.36% and reached 15.86. The 50-share Nifty was down by 16.50 points or 0.21% to settle at 7,765.40. 

Nifty December 2015 futures closed at 7808.80 on Monday at a premium of 43.40 points over spot closing of 7,765.40, while Nifty January 2016 futures ended at 7847.20 at a premium of 81.80 points over spot closing. Nifty December futures saw contraction of 0.20 million (mn) units, taking the total outstanding open interest (OI) to 19.35 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 0.30 points at 81.45 compared with spot closing of 81.15. The number of contracts traded were 9,614.        

SBI December 2015 futures traded at a premium of 1.15 points at 239.95 compared with spot closing of 238.80. The number of contracts traded were 7,531.     

Axis Bank December 2015 futures traded at a premium of 3.75 points at 464.95 compared with spot closing of 461.20. The number of contracts traded were 7,233.        

Tata Steel December 2015 futures traded at a premium of 1.50 points at 244.70 compared with spot closing of 243.20. The number of contracts traded were 7,965.           

ITC December 2015 futures traded at a premium of 2.55 points at 315.55 compared with spot closing of 313.00. The number of contracts traded were 15,699.   

Among Nifty calls, 8000 SP from the December month expiry was the most active call with an addition of 0.50 million open interests. Among Nifty puts, 7800 SP from the December month expiry was the most active put with an addition of 0.08 million open interests. The maximum OI outstanding for Calls was at 8000 SP (6.07 mn) and that for Puts was at 8000 SP (4.33 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7811.85--- Pivot Point 7778.95--- Support --- 7732.50.

The Nifty Put Call Ratio (PCR) finally stood at 0.82 for December month contract.  The top five scrips with highest PCR on OI were UCO Bank (1.68), HCL Tech (1.24), Lupin (1.23), KSCL (1.23) and STAR (1.19).   

Among most active underlying, ITC witnessed an addition of 1.42 million of Open Interest in the December month futures contract, followed by Sun Pharmaceuticals Industries witnessing a contraction of 2.79 million of Open Interest in the December month contract; Reliance Communications witnessed a contraction of 0.28 million of Open Interest in the December month contract, Reliance Industries witnessed an addition of 0.47 million of Open Interest in the December month contract and Maruti Suzuki India witnessed an addition of 0.07 million units of Open Interest in the December month's future contract.