Nifty ends lower over 1% amid weak global cues

The fifty stock index - Nifty - ended lower on Tuesday on account of sustained selling by fund and retail investors amid weak global cues. Sentiment was under pressure after the Reserve Bank of India (RBI) has kept its key policy rates unchanged, opting to wait for the government’s annual budget statement at the end of February for further easing. Meanwhile, Moody’s Investors Service’s report that RBI’s target to bring down retail inflation at 5 per cent by March 2017 will face some risks from monsoon uncertainty and execution of 7th Pay Panel recommendations, while macro-economic factors will be critical for sustaining growth. Besides, depreciation in Indian rupee too dampened the sentiments. The rupee depreciated by 12 paise to trade at 67.96 against the US dollar at the time of equity markets closing. Back home, after getting a flat-to-positive opening , benchmark were alternating between positive and negative territory for the most part of day, but sharp selling was witnessed in the last leg of hour that dragged the market intraday low, and Nifty ended with loss of over 100 points.  

On the global front, Asian markets were trading mostly in red, on account of fall in crude oil as well as growing concerns of a global slowdown. European equities were trading lower over 1.50 percent as crude oil prices slipped again on oversupply concerns and companies such as oil major BP disappointed on the earnings front.

The top gainers from the F&O segment were United Breweries, Just Dial and Oracle Financial Services Software. On the other hand, the top losers were Vedanta, Tata Steel and Steel Authority of India. In the index options segment, maximum OI was being seen in the 7500-8000 calls and 7000-7500 puts. In today's session, while the traders preferred to exit 7400 put, heavy buildup was seen in the 7200 put. On the other hand, traders exited from 7400 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 0.81% and reached 18.03. The 50-share Nifty was down by 100.40 points or 1.33% to settle at 7,455.55.   

Nifty February 2016 futures closed 7474.95 on Tuesday at a premium of 19.40 points over spot closing of 7,455.55, while Nifty March 2016 futures ended at 7490.35 at a premium of 34.80 points over spot closing. Nifty February futures saw contraction of 0.73 million (mn) units, taking the total outstanding open interest (OI) to 19.33 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 0.70 points at 169.60 compared with spot closing of 168.90. The number of contracts traded were 44,069.             

ICICI Bank February 2016 futures traded at a premium of 0.45 points at 210.95 compared with spot closing of 210.50. The number of contracts traded were 31,142.                      

Axis Bank February 2016 futures traded at a premium of 1.05 points at 392.15 compared with spot closing of 391.10. The number of contracts traded were 22,285.                          

Tata Steel February 2016 futures traded at a premium of 0.90 points at 231.10 compared with spot closing of 230.20. The number of contracts traded were 15,621.            

Reliance Industries February 2016 futures traded at a premium of 9.15 points at 1004.65 compared with spot closing of 995.50. The number of contracts traded were 14,830. 

Among Nifty calls, 7600 SP from the February month expiry was the most active call with an addition of 0.27 million open interests. Among Nifty puts, 7500 SP from the February month expiry was the most active put with a contraction of 0.12 million open interests. The maximum OI outstanding for Calls was at 7600 SP (4.23 mn) and that for Puts was at 7400 SP (4.24 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7545.22 --- Pivot Point 7486.63 --- Support --- 7396.97.        

The Nifty Put Call Ratio (PCR) finally stood at 0.99 for February month contract. The top five scrips with highest PCR on OI were Godrej Consumer Products (1.67), Hero MotoCorp (1.63), Indian Overseas Bank (1.50), Yes Bank (1.27) and Container Corporation of India (1.24).

Among most active underlying, State Bank of India witnessed an addition of 1.96 million of Open Interest in the February month futures contract, followed by Yes Bank witnessing a contraction of 0.92 million of Open Interest in the February month contract; ICICI Bank witnessed a contraction of 0.27 million of Open Interest in the February month contract, Aurobindo Pharma witnessed an addition of 1.23 million of Open Interest in the February month contract and Axis Bank witnessed an addition of 0.93 million units of Open Interest in the February  month's future contract.