Nifty ends lower on Jan F&O expiry

The fifty stock index - Nifty - ended lower on Thursday, as traders rolled over positions in derivatives segment from January series to February series.  Further, Sentiment remained subdued in the absence of any positive trigger amid sustained capital outflows by foreign funds. Besides, some cautiousness was also came in on report that the Reserve Bank of India (RBI) is expected to leave its key interest rate steady at 6.75% next week and only make one cut this year as rising inflation ties its hands.  However, down side remained capped with the report that business sentiment among Indian companies rose for the first time in three months in January, largely supported by the first increase in new orders since last June. The  MNI India Business Sentiment Indicator, a gauge of current sentiment among BSE-listed companies, rose from 60.7 in December to 61.8 in January -- the highest since October 2015 as domestic orders strengthened. Meanwhile, telecom service providers were under pressure after the Telecom Regulatory Authority of India (Trai) has proposed auction of 700 MHz spectrum at a reserve price of Rs 11,485 crore per MHz.  After getting a weak start, Nifty was alternating between positive and negative territory throughout the session and finally ended with cut of over 13 points.

On the global front, Asian markets ended mostly in green after China's central bank People's Bank of China announced a large injection of cash into the financial system to pre-empt a holiday-induced funding squeeze and offset rapid capital outflows. But, Chinese stocks fell on continued concerns about China's slowing economy.  European markets were trading in red with France's CAC 40 down by 0.34%, Germany's DAX down by 0.67% and UK's FTSE 100 down by 0.43%.

The top gainers from the F&O segment were SKS Microfinance, Vedanta and Cairn India.  On the other hand, the top losers were Engineers India, Just Dial and Syndicate Bank. In the index options segment, maximum OI was being seen in the 7450-8200 calls and 6800-7400 puts. In today's session, while the traders preferred to exit 7500 put, heavy buildup was seen in the 7400 put. On the other hand, traders exited from 7400 Call, while 7500 call witnessed considerable OI addition.  

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 6.07% and reached 17.90. The 50-share Nifty was down by 13.10 points or 0.18% to settle at 7,424.65.   

Nifty February 2016 futures closed 7448.35 on Thursday at a premium of 23.70 points over spot closing of 7,424.65, while Nifty March 2016 futures ended at 7463.40 at a premium of 38.75 points over spot closing. Nifty February futures saw addition of 3.92 million (mn) units, taking the total outstanding open interest (OI) to 18.82 million (mn) units. The near month derivatives contract will expire on February 25, 2016.                 

From the most active contracts, SBI February 2016 futures traded at a premium of 0.35 points at 186.10 compared with spot closing of 185.75. The number of contracts traded were 22,602.            

ICICI Bank February 2016 futures traded at a premium of 0.50 points at 233.75 compared with spot closing of 233.25. The number of contracts traded were 22,771.                      

Axis Bank February 2016 futures traded at a discount of 0.45 points at 407.85 compared with spot closing of 408.30. The number of contracts traded were 22,888.                          

Reliance Industries February 2016 futures traded at a premium of 6.50 points at 1022.00 compared with spot closing of 1,015.50. The number of contracts traded were 24,289.                              

HDFC Bank February 2016 futures traded at a premium of 2.60 points at 1036.75 compared with spot closing of 1,034.15. The number of contracts traded were 24,790. 

Among Nifty calls, 7500 SP from the February month expiry was the most active call with an addition of 2.23 million open interests. Among Nifty puts, 7400 SP from the February month expiry was the most active put with an addition of 2.19 million open interests. The maximum OI outstanding for Calls was at 7500 SP (8.24 mn) and that for Puts was at 7400 SP (7.93 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7459.13 --- Pivot Point 7434.37 --- Support --- 7399.88.        

The Nifty Put Call Ratio (PCR) finally stood at 1.11 for February month contract. The top five scrips with highest PCR on OI were Oil India (5.00), Shriram Transport Finance (2.29), Indian Overseas Bank (2.10), Kaveri Seed Company (1.96) and ACC (1.89).

Among most active underlying, Maruti Suzuki India witnessed a contraction of 0.40 million of Open Interest in the February month futures contract, followed by Reliance Industries witnessing a contraction of 5.04 million of Open Interest in the February month contract; Larsen & Toubro witnessed an addition of 5.41 million of Open Interest in the February month contract, ICICI Bank witnessed an addition of 13.60 million of Open Interest in the February month contract and State Bank of India witnessed a contraction of 11.83 million units of Open Interest in the February  month's future contract.