Nifty tumbles lower for fourth day in a row; ends below 7650 mark

The local benchmark, Nifty continued its southward journey for sixth consecutive day on Wednesday and finished the choppy day of trade with a cut of over one percent as investors grew worried about a possible delay in the key tax reform bill. Besides, weakness in the commodities stocks led the benchmark index lower, as crude oil prices slumped to fresh lows.  On the global front, Asian markets ended mostly in red on Wednesday as crumbling oil prices took a toll on energy and resource shares, with cooling demand from China putting more pressure on resources-reliant economies. Further, European shares were trading weak with Germany’s DAX down by 0.20%, France’s CAC down by 0.20% and UK’s FTSE down by 0.20%. 

Back home, the benchmark got off to a somber opening, extending the downtrend for the sixth straight session as pessimistic sentiments prevailed across Asian markets. Thereafter, the key indices failed to show any kind of fervor due to lack of encouraging leads. Investors’ sentiments remained down-beat on fading hopes of passing GST Bill in this winter session after opposition raised their decibel protesting against Delhi High Court summons to Congress leaders Sonia Gandhi and Rahul Gandhi in the National Herald case which led to Parliament getting adjourned yet again. Besides, the continuous outflows of capital by the Foreign Portfolio Investors (FPI) have also weighed on the local equities. The selling pressure accentuated in the later afternoon trades as investors took to across the board risk aversion. Finally, Nifty ended the session below its crucial 7,650 mark with a cut of over a percent. On the sectoral space, the Metal index remained the top laggard in the space and settled with over three percent cuts following a weak trade report from China. The world's second largest economy saw its trade numbers weaken in November, with exports falling for the fifth straight month and imports dropping for the 13th consecutive month, leading to a trade surplus of $54.10 billion for the month. Further, shares of IT companies came under selling pressure after the report that two American Senators introduced legislation in the Senate proposing to cut the number of popular H-1B visas by 15,000 and that such a visa be given to highest wage earner first. Further, logistics companies also witnessed betting as the hopes for the clearance of the crucial GST bill seems fading.

The top gainers from the F&O segment were Indiabulls Real Estate, Bharat Heavy Electricals and Power Finance Corporation. On the other hand, the top losers were NCC, CESC and Vedanta. In the index options segment, maximum OI was being seen in the 7900-8300 calls and 7500-8000 puts. In today's session, while the traders preferred to exit 7800 put, heavy buildup was seen in the 7500 put. On the other hand, traders exited from 8100 Call, while 7700 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 4.71% and reached 16.72. The 50-share Nifty was down by 89.20 points or 1.16% to settle at 7,612.50. 

Nifty December 2015 futures closed at 7644.35 on Wednesday at a premium of 31.85 points over spot closing of 7,612.50, while Nifty January 2016 futures ended at 7681.65 at a premium of 69.15 points over spot closing. Nifty December futures saw addition of 0.29 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, Axis Bank December 2015 futures traded at a premium of 0.35 points at 452.15 compared with spot closing of 451.80. The number of contracts traded were 12,127.     

Tata Steel December 2015 futures were trading flat compared with spot closing of 227.30. The number of contracts traded were 9,273.         

Tata Motors December 2015 futures traded at a premium of 1.75 points at 395.90 compared with spot closing of 394.15. The number of contracts traded were 8,893.           

Reliance Industries December 2015 futures traded at a premium of 3.65 points at 921.40 compared with spot closing of 917.75. The number of contracts traded were 10,275.              

Sun Pharmaceuticals Industries December 2015 futures traded at a premium of 0.40 points at 761.30 compared with spot closing of 760.90. The number of contracts traded were 9,545.         

Among Nifty calls, 7800 SP from the December month expiry was the most active call with an addition of 0.81 million open interests. Among Nifty puts, 7600 SP from the December month expiry was the most active put with an addition of 0.47 million open interests. The maximum OI outstanding for Calls was at 8000 SP (7.19 mn) and that for Puts was at 7500 SP (6.44 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7674.60--- Pivot Point 7640.75--- Support --- 7578.65.

The Nifty Put Call Ratio (PCR) finally stood at 0.83 for December month contract.  The top five scrips with highest PCR on OI were Lupin (1.27), STAR (1.27), ACC (1.16), UCO Bank (1.14) and Shriram Transport Finance Company (1.16).   

Among most active underlying, Dr. Reddy's Laboratories witnessed an addition of 0.08 million of Open Interest in the December month futures contract, followed by Reliance Industries witnessing an addition of 0.35 million of Open Interest in the December month contract; Tata Consultancy Services witnessed a contraction of 0.49 million of Open Interest in the December month contract, Maruti Suzuki India witnessed a contraction of 0.05 million of Open Interest in the December month contract and Axis Bank  witnessed an addition of 1.56 million units of Open Interest in the December month's future contract.