Nifty ends below 7050 level

The fifty stock index -- Nifty -- ended lower on Tuesday on account of selling in the front line blue chip counters. Sentiments remained down-beat with the report that India’s merchandise exports fell for the 14th consecutive month with shipments in January, 2016 contracting 13.6 percent year-on-year to $21 billion due to a steep fall in shipment of petroleum products and engineering goods amid tepid global demand. Meanwhile investors remained concerned with India Ratings maintaining a negative outlook for infrastructure sector for the next fiscal as it sees a high concentration of poorly performing assets. Back home, Indian equity benchmark made a positive start but market turned into negative territory and traded choppy for most part of the day’s trade. Thereafter, sharp selling was witnessed in the last leg of trade that dragged the Nifty below its 7,050 level and ended with lose of over 110 points. 

On the global front, Asian markets ended higher on Tuesday, as a combination of stabilizing Chinese markets, rebounding oil prices and solid U.S. consumption data prompted investors to look for bargains after last week's rout. European stocks were trading lower on Tuesday, moving to session lows after a dreary reading of German economic sentiment and reports that some major oil-producing nations will freeze - not cut - production.

The top gainers from the F&O segment were Wockhardt, Adani Ports and Special Economic Zone and Adani Power. On the other hand, the top losers were Strides Shasun, Syndicate Bank and Bharti Infratel. In the index options segment, maximum OI was being seen in the 7000-8000 calls and 6500-7400 puts. In today's session, while the traders preferred to exit 7100 put, heavy buildup was seen in the 6900 put. On the other hand, traders exited from 7500 Call, while 7200 call witnessed considerable OI addition. 

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 2.97% and reached 23.04. The 50-share Nifty was down by 114.70 points or 1.60% to settle at 7,048.25.   

Nifty February 2016 futures closed 7054.10 on Tuesday at a premium of 5.85 points over spot closing of 7,048.25, while Nifty March 2016 futures ended at 7071.40 at a premium of 23.15 points over spot closing. Nifty February futures saw addition of 0.76 million (mn) units, taking the total outstanding open interest (OI) to 21.18 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 discount of 0.80 points at 155.55 compared with spot closing of 156.35. The number of contracts traded were 46,270.              

ICICI Bank February 2016 futures traded at a premium of 0.05 points at 195.75 compared with spot closing of 195.70. The number of contracts traded were 22,291.                  

Bank of Baroda February 2016 futures traded at a discount of 0.25 points at 130.80 compared with spot closing of 131.05. The number of contracts traded were 21,957.               

Axis Bank February 2016 futures traded at a premium of 0.65 points at 405.65 compared with spot closing of 405.00. The number of contracts traded were 18,681.                                              

Tata Motors February 2016 futures traded at a premium of 0.25 points at 302.05 compared with spot closing of 301.80. The number of contracts traded were 15,968.  

Among Nifty calls, 7200 SP from the January month expiry was the most active call with an addition of 0.85 million open interests. Among Nifty puts, 7100 SP from the January month expiry was the most active put with a contraction of 0.43 million open interests. The maximum OI outstanding for Calls was at 7500 SP (5.48 mn) and that for Puts was at 7000 SP (5.33 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7156.03 --- Pivot Point 7096.87 --- Support --- 6989.08.          

The Nifty Put Call Ratio (PCR) finally stood at 0.78 for January month contract. The top five scrips with highest PCR on OI were Godrej Consumer Products (3.00), Eicher Motors (1.46), Hero MotoCorp (1.41), Oil India (1.38) and Indian Overseas Bank (1.24).  

Among most active underlying, State Bank of India witnessed a contraction of 1.81 million of Open Interest in the January month futures contract, followed by Reliance Industries witnessing a contraction of 0.93 million of Open Interest in the January month contract; Bank of Baroda witnessed a contraction of 2.32 million of Open Interest in the January month contract, Maruti Suzuki India witnessed a contraction of 0.06 million of Open Interest in the January month contract and Tata Steel witnessed an addition of 0.32 million units of Open Interest in the January month's future contract.