Nifty resume southward journey after a day of halt

A session after showcasing a vivacious rally and amassing close to a percent, Indian equity index Nifty faltered and failed to extend the winning momentum on Friday as investors turned cautious ahead of FOMC meet in the next week along-with IIP numbers to be declared later in the day today & inflation data next week. Besides, RBI added to nervousness in the markets by announcing that they would intervene in the Exchange Traded Currency Derivatives (ETCD) market, if required. On the global front, Ashin markets ended the week on negative ground as plunging crude oil prices and a tumble in China's Yuan to almost 4-1/2-year lows added to worries about receding global growth.  A supply glut in oil markets and cooling growth in China, the world's biggest commodities consumer, have pressured many asset markets. Furthermore, all the major European markets also declined by over half a percent on Friday as weak commodity prices put pressure on markets before a widely expected rise in US interest rates next week.

Back home, after recording a firm start the key index Nifty immediately slipped in to negative territory led by fall in the Realty, FMCG and Capital Goods stocks. Thereafter, the key index failed to show any kind of fervor due to lack of encouraging leads. Sentiments remained subdued on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 580 crore on December 10, 2015. Besides, investors’ sentiments were further dampened over a possible delay in the passage of the key GST Bill. The key gauge suffered a setback in afternoon trades as sudden bouts of profit booking emerged in the local markets immediately after a somber European market opening. Though the bourses recovered from the lows of the day but could not succeed in minimizing the huge losses by the end of trading session. On the sectoral front, banking shares came under selling pressure with Bank Nifty declined by over 2 percent as the rating agency Fitch has said that credit growth of banking sector may moderate further in the current financial year as worsening asset quality coupled with capital constraints were acting as impediments. Auto stocks too witnessed selling as Delhi government announced that it will seek advancing of the rollout of Bharat Stage VI emission norms in Delhi to 2017 for countering air pollution, while the National Green Tribunal (NGT) ordered that no new diesel vehicles would be registered in Delhi.

The top gainers from the F&O segment were Havells India, GMR Infrastructure and NCC. On the other hand, the top losers were Union Bank of India, Shriram Transport Finance Company and Rural Electrification Corporation. In the index options segment, maximum OI was being seen in the 8000-8400 calls and 7500-8000 puts. In today's session, while the traders preferred to exit 7900 put, heavy buildup was seen in the 7600 put. On the other hand, traders exited from 8400 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 5.46% and reached 17.18. The 50-share Nifty was down by 72.85 points or 0.95% to settle at 7,610.45. 

Nifty December 2015 futures closed at 7627.90 on Friday at a premium of 17.45 points over spot closing of 7,610.45, while Nifty January 2016 futures ended at 7664.95 at a premium of 54.50 points over spot closing. Nifty December futures saw addition of 0.57 million (mn) units, taking the total outstanding open interest (OI) to 19.44 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 0.45 points at 227.65 compared with spot closing of 227.20. The number of contracts traded were 17,230.     

ICICI Bank December 2015 futures traded at a premium of 0.85 points at 250.75 compared with spot closing of 249.90. The number of contracts traded were 16,417.          

Axis Bank December 2015 futures traded at a premium of 2.30 points at 441.65 compared with spot closing of 439.35. The number of contracts traded were 18,027.           

Tata Steel December 2015 futures traded at a premium of 0.20 points at 241.55 compared with spot closing of 241.30. The number of contracts traded were 16,693.              

Tata Motors Industries December 2015 futures traded at a premium of 0.75 points at 379.75 compared with spot closing of 379.00. The number of contracts traded were 10,611.Among Nifty calls, 7800 SP from the December month expiry was the most active call with an addition of 0.54 million open interests. Among Nifty puts, 7600 SP from the December month expiry was the most active put with a contraction of 0.12 million open interests. The maximum OI outstanding for Calls was at 8000 SP (6.74 mn) and that for Puts was at 7500 SP (5.91 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7683.90--- Pivot Point 7629.60--- Support --- 7556.15.

The Nifty Put Call Ratio (PCR) finally stood at 0.81 for December month contract.  The top five scrips with highest PCR on OI were STAR (1.41), Lupin (1.22), KSCL (1.16), UCO Bank (0.98) and ACC (0.97).   

Among most active underlying, State Bank of India witnessed an addition of 0.21 million of Open Interest in the December month futures contract, followed by Tata Steel witnessing a contraction of 0.13 million of Open Interest in the December month contract; Maruti Suzuki India witnessed a contraction of 0.01 million of Open Interest in the December month contract, Axis Bank witnessed an addition of 0.25 million of Open Interest in the December month contract and Reliance Industries witnessed a contraction of 0.27 million units of Open Interest in the December month's future contract.