Nifty snaps four days winning streak; ends below 7,800 mark

The fifty share index -- Nifty-- ended lower on Friday as participants booked profits at higher attractive valuations amid a weak trend in the global peers. Besides, the revision in the GDP growth target for FY16 down to 7-7.5% from its earlier projections of 8-8.1% estimated in February on account of rising retail inflation and poor monsoons hurt the domestic sentiments. On the global front, all Asian market ended in red on the final day of the week as investors shifted their focused back on falling oil prices and slowing global growth after cheering the Federal Reserve's historic move on Wednesday. Furthermore, European stocks slipped in early trade, as investors wrap up the last trading week before the Christmas holiday, while digesting monetary policy moves by the U.S. Federal Reserve and the Bank of Japan.

Back home, after getting a weak start, Indian benchmark Nifty extended its losses in late morning session, though the index traded near its crucial 7800 mark for most part of the session, selling was intensified final hour of the trade, which took the market to lowest part of the session, however some buying in last minutes pulled the index from day’s low and ended the session with a cut of over a percent. Sentiments remained down-beat with the former RBI Governor C Rangarajan stating that the country may see some capital outflow and weakness in stocks following the rate hike by US Federal Reserve, but he said that the negative impact is not expected to be severe. He also added that India's situation on the balance of payment side is reasonably under control now. However, investors got some support with the Finance Ministry stating that India is well prepared to deal with the impact of the US Federal Reserve interest rate hike and the end of uncertainties will actually help policy makers in emerging economies. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 638 crore on December 17, 2015. Meanwhile, shares of IT companies came under selling pressure after the US Congress doubled a special fee on the popular H-1B and L-1 visas raising it up to $4,500 to fund a 9/11 healthcare act and biometric tracking system. Another sector that witnessed higher selling in today’s trade was banks, which slide after the RBI released the final guidelines on computing interest rates on advances of commercial banks based on the marginal cost of funds. Shares of oil exploration and production (E&P) companies also fell as global crude oil prices declined.

The top gainers from the F&O segment were BEML, Dish TV India and Adani Power. On the other hand, the top losers were Just Dial, Vedanta and UltraTech Cement. In the index options segment, maximum OI was being seen in the 7800-8200 calls and 7500-7800 puts. In today's session, while the traders preferred to exit 7400 put, heavy buildup was seen in the 8100 put. On the other hand, traders exited from 8300 Call, while 7900 call witnessed considerable OI addition.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 1.95% and reached 14.49. The 50-share Nifty was down by 82.40 points or 1.05% to settle at 7,761.95. 

Nifty December 2015 futures closed at 7790.10 on Friday at a premium of 28.15 points over spot closing of 7,761.95, while Nifty January 2016 futures ended at 7822.50 at a premium of 60.55 points over spot closing. Nifty December futures saw contraction of 0.42 million (mn) units, taking the total outstanding open interest (OI) to 18.62 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 1.35 points at 227.60 compared with spot closing of 226.25. The number of contracts traded were 16,126.       

ICICI Bank December 2015 futures traded at a premium of 0.10 points at 250.20 compared with spot closing of 250.10. The number of contracts traded were 10,855.               

Axis Bank December 2015 futures traded at a premium of 2.15 points at 434.15 compared with spot closing of 432.00. The number of contracts traded were 17,614.              

Tata Steel Industries December 2015 futures traded at a discount of 0.75 points at 255.20 compared with spot closing of 255.95. The number of contracts traded were 8,499.            

Reliance Industries December 2015 futures traded at a premium of 5.35 points at 995.95 compared with spot closing of 990.60. The number of contracts traded were 13,042.  Among Nifty calls, 7900 SP from the December month expiry was the most active call with an addition of 0.63 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 8000 SP (8.37 mn) and that for Puts was at 7500 SP (5.40 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7814.28--- Pivot Point 7783.82--- Support --- 7731.48.

The Nifty Put Call Ratio (PCR) finally stood at 0.84 for December month contract.  The top five scrips with highest PCR on OI were ZEEL (1.39), Lupin (1.26), Bajaj Finance (1.22), IndusInd Bank (1.07) and ACC (1.05).   

Among most active underlying, Reliance Industries witnessed an addition of 0.02 million of Open Interest in the December month futures contract, followed by State Bank of India witnessing an addition of 4.63 million of Open Interest in the December month contract; Axis Bank witnessed a contraction of 0.70 million of Open Interest in the December month contract, Maruti Suzuki India witnessed an addition of 0.07 million of Open Interest in the December month contract and Larsen & Toubro witnessed a contraction of 0.09 million units of Open Interest in the December month's future contract.