Nifty end flat with bit of positive bias ahead of Jan F&O expiry

The fifty shares index - Nifty - ended flat as investors avoided risky bets ahead the expiry of January derivative contracts tomorrow and the US Federal Reserve policy statement due later in the day. Sentiments got some support with statement of Standard & Poor's Rating Services that Indian economy is less vulnerable to external shocks as it is mainly driven by household consumption and government spending, and not dependent on hot money which can move out quickly. However, upside remained capped with the SBI Composite Index falling below the 50 mark to 47.3 in January. Manufacturing activity in the country dipped to a one-year low, suggesting moderation in growth. After getting a positive start, the benchmark nifty were alternating between positive and negative territory throughout the session and finally ended flat with bit of positive bias.

On the global front, Asian markets ended mostly in green, with Japanese shares climbing to a near two-week high in the run-up to a BOJ meeting, after Wall Street stocks rose sharply overnight amid a rebound in oil prices, upbeat consumer confidence and home price data. However, European stocks were trading in pessimistic note.

The top gainers from the F&O segment were Union Bank of India, Hindustan Zinc and Divi's Laboratories.  On the other hand, the top losers were Reliance Communications, Bharat Heavy Electricals and Exide Industries. In the index options segment, maximum OI was being seen in the 7400-8200 calls and 6900-7500 puts. In today's session, while the traders preferred to exit 7300 put, heavy buildup was seen in the 7400 put. On the other hand, traders exited from 7600 Call, while 7450 call witnessed considerable OI addition.  

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 4.34% and reached 19.05. The 50-share Nifty was up by 1.60 points or 0.02% to settle at 7,437.75.   

Nifty January 2016 futures closed 7433.40 on Wednesday at a discount of 4.35 points over spot closing of 7,437.75, while Nifty February 2016 futures ended at 7443.30 at a premium of 5.55 points over spot closing. Nifty January futures saw contraction of 2.98 million (mn) units, taking the total outstanding open interest (OI) to 12.21 million (mn) units. The near month derivatives contract will expire on January 28, 2016.                

From the most active contracts, SBI January 2016 futures traded at a premium of 0.75 points at 184.75 compared with spot closing of 184.00. The number of contracts traded were 28,898.            

ICICI Bank January 2016 futures traded at a discount of 0.05 points at 236.75 compared with spot closing of 236.80. The number of contracts traded were 25,192.                      

Axis Bank January 2016 futures traded at a discount of 0.20 points at 414.80 compared with spot closing of 415.00. The number of contracts traded were 27,812.                         

HDFC Bank January 2016 futures traded at a discount of 0.20 points at 1034.70 compared with spot closing of 1,034.90. The number of contracts traded were 23,560.            

Reliance Industries January 2016 futures traded at a premium of 3.30 points at 1000.30 compared with spot closing of 997.00. The number of contracts traded were 21,747.    

Among Nifty calls, 7500 SP from the January month expiry was the most active call with an addition of 0.41 million open interests. Among Nifty puts, 7400 SP from the January month expiry was the most active put with an addition of 1.08 million open interests. The maximum OI outstanding for Calls was at 7500 SP (6.00 mn) and that for Puts was at 7400 SP (5.74 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7470.53 --- Pivot Point 7445.12 --- Support --- 7412.33.        

The Nifty Put Call Ratio (PCR) finally stood at 0.90 for January month contract. The top five scrips with highest PCR on OI were United Breweries (2.39), Ultratech Cement (1.49), JSW Steel (1.23), Wipro (1.10) and Infosys (1.06).Among most active underlying, Reliance Industries witnessed a contraction of 4.64 million of Open Interest in the January month futures contract, followed by State Bank of India witnessing a contraction of 1.06 million of Open Interest in the January month contract; Maruti Suzuki India witnessed a contraction of 0.52 million of Open Interest in the January month contract, Axis Bank witnessed a contraction of 1.14 million of Open Interest in the January month contract and HDFC Bank  witnessed a contraction of 5.38 million units of Open Interest in the January month's future contract.