Nifty snaps 4-day winning streak, ends below 7,150 mark

The fifty stock index -- Nifty -- ended lower on Tuesday on account of sustained selling by fund and retail investors. Weakness in global markets also weighted the sentiment. Sentiments remained weak since morning as Investors were jittery ahead of the government's 2016/17 budget, which is due on February 29. Moreover, sentiments were under pressure on report that exports of over half of the sectors, out of the 30 closely monitored by the Commerce Ministry, were in the negative zone in January due to a fall in global prices and demand. Shares of oil marketing company were down after the concerns that government may impose customs duty on crude oil imports in the forthcoming Union Budget 2016-17. After cautious start, benchmark entered in to red and extended its losses to end near day’s low with cut of over 120 points.   

On the global front, Asian markets ended mostly in red, as the oil price rally that had boosted global equity markets reversed, while the euro and sterling were hit by uncertainty over Britain's membership of the European Union. European markets were trading lower, with Germany’s DAX was down by 0.80%, UK’s FTSE 100 was down by 0.55% and France’s CAC was down by 0.45.

The top gainers from the F&O segment were Reliance Communications, Syndicate Bank and JSW Steel. On the other hand, the top losers were Hindustan Petroleum Corporation, DLF and Bank of Baroda. In the index options segment, maximum OI was being seen in the 7100-8000 calls and 6800-7400 puts. In today's session, while the traders preferred to exit 7200 put, heavy buildup was seen in the 7050 put. On the other hand, traders exited from 7350 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 13.40% and reached 23.83. The 50-share Nifty was down by 125.00 points or 1.73% to settle at 7,109.55.   

Nifty February 2016 futures closed 7113.10 on Tuesday at a premium of 3.55 points over spot closing of 7,109.55, while Nifty March 2016 futures ended at 7132.70 at a premium of 23.15 points over spot closing. Nifty February futures saw contraction of 4.27 million (mn) units, taking the total outstanding open interest (OI) to 14.33 million (mn) units. The near month derivatives contract will expire on February 25, 2016.                    

From the most active contracts, ICICI Bank February 2016 futures traded at a discount of 0.05 points at 191.85 compared with spot closing of 191.90. The number of contracts traded were 31,872.            

SBI February 2016 futures traded at a discount of 0.45 points at 158.15 compared with spot closing of 158.60. The number of contracts traded were 31,160.                      

Axis Bank February 2016 futures traded at a premium of 0.05 points at 384.95 compared with spot closing of 384.90. The number of contracts traded were 25,426.                                               

Reliance Industries February 2016 futures traded at a premium of 5.20 points at 949.10 compared with spot closing of 943.90. The number of contracts traded were 24,346.                     

HDFC Bank February 2016 futures traded at a premium of 0.95 points at 970.95 compared with spot closing of 970.00. The number of contracts traded were 23,297.      

Among Nifty calls, 7200 SP from the January month expiry was the most active call with an addition of 2.76 million open interests. Among Nifty puts, 7100 SP from the January month expiry was the most active put with an addition of 0.09 million open interests. The maximum OI outstanding for Calls was at 7200 SP (6.80 mn) and that for Puts was at 7000 SP (5.18 mn). The respective Support and Resistance levels of Nifty are: Resistance 7203.93 --- Pivot Point 7147.32 --- Support --- 7052.93.            

The Nifty Put Call Ratio (PCR) finally stood at 0.69 for January month contract. The top five scrips with highest PCR on OI were Hero MotoCorp (2.21), Godrej Consumer Products (2.00), Eicher Motors (1.62), JSW Steel (1.47) and Indian Overseas Bank (1.32). 

Among most active underlying, State Bank of India witnessed a contraction of 12.90 million of Open Interest in the January month futures contract, followed by Reliance Industries witnessing a contraction of 5.68 million of Open Interest in the January month contract; ICICI Bank witnessed a contraction of 14.28 million of Open Interest in the January month contract, HDFC Bank witnessed a contraction of 5.83 million of Open Interest in the January month contract and Axis Bank witnessed a contraction of 8.45 million units of Open Interest in the January month's future contract.