Nifty witnesses bloodbath on Indian Army’s surgical strikes

F&O expiry day turned out to be a daunting session of trade for Nifty which ended near its intraday low with a cut of over one and half percent, as India carried out surgical strikes against Pakistan.  After a gap up opening, market managed to hold their gains and traded in a tight band in first half of the day, as investors took some encouragement from Finance Minister Arun Jaitley’s statement, who reacting to 32-point jump on World Economic Forum’s Global Competitiveness Index in two years, has said that it shows India has covered a long distance and is on its way to emerge as a major player in global economy. However, market took U-turn in second half and Nifty slipped into red and never looked confident afterwards to end near intraday lows, as investor panicked after the Army said it has conducted surgical strikes against terrorists across Line of Control. Also, the government has called an all-party meeting in the wake of surgical strikes across the India-Pakistan border. Anxiety among the investors can be seen through India Volatility Index (VIX), which surged by around 33 per cent to a 3-month high of 18.45. Investor also remained on sideline ahead of upcoming monetary policy review on October 4.

On the global front, European stocks saw further upside on Thursday, a day after OPEC countries agreed to modest oil output cuts in the first such deal since 2008. Asian equity markets ended in green, after bank shares recovered in Europe, U.S. durable goods orders data beat estimates and OPEC members surprised market participants with a preliminary deal to curb output.

The top gainers from the F&O segment were Bharti Infratel, United Spirits and Colgate Palmolive. On the other hand, the top losers were BHEL, Aurobindo Pharma and Hindalco Industries. In the index options segment, maximum OI was being seen in the 8500-9000 calls and 8500-8600 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility addition by 33.24% and reached 18.45. The 50-share Nifty was down by 153.90 points or 1.76% to settle at 8,591.25

Nifty October 2016 futures closed at 8638.25 on Thursday at a premium of 47.00 points over spot closing of 8,591.25, while Nifty November 2016 futures ended at 8679.35 at a premium of 88.10 points over spot closing. Nifty September futures saw addition of 6.03 million (mn) units, taking the total outstanding open interest (OI) to 23.82 million (mn) units. The near month derivatives contract will expire on October 27, 2016.

From the most active contracts, State Bank of India October 2016 futures traded at a discount of 0.75 points at 248.25 compared with spot closing of 249.00. The numbers of contracts traded were 24,630.

ICICI Bank October 2016 futures traded at a discount of 0.15 points at 251.80 compared with spot closing of 251.95. The numbers of contracts traded were 30,996.

HDFC Bank October 2016 futures traded at a premium of 15.95 points at 1290.60 compared with spot closing of 1,274.65. The numbers of contracts traded were 24,904.

Axis Bank October 2016 futures traded at a premium of 0.40 points at 541.40 compared with spot closing of 541.00. The numbers of contracts traded were 29,666.   

Sun Pharmaceuticals Industries October 2016 futures traded at a premium of 0.80 points at 741.70 compared with spot closing of 740.90. The numbers of contracts traded were 27,279.   

Among Nifty calls, 9000 SP from the September month expiry was the most active call with a addition of 0.66 million open interests. Among Nifty puts, 8500 SP from the September month expiry was the most active put with an addition of 0.62 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.58 mn) and that for Puts was at 8500 SP (3.44 mn). The respective Support and Resistance levels of Nifty are: Resistance 8741.85--- Pivot Point 8650.05--- Support --- 8499.45.             

The Nifty Put Call Ratio (PCR) finally stood at 0.99 for September month contract. The top five scrips with highest PCR on OI were APOLLOHOSP (3.64), CUMMINSIND (2.60), M&M (1.65), ACC (1.57) and WOCKPHARMA  (1.39).   

Among most active underlying Yes Bank witnessed an addition of 2.29 million of Open Interest in the September month futures contract, followed Reliance Industries witnessing an addition of 2.64 million of Open Interest in the September month contract, SBI witnessed a addition  of 11.44 million of Open Interest in the September month contract, ICICI Bank witnessed an addition  of 18.44 million of Open Interest in the September month contract and Axis Bank witnessed an addition  of 6.25 million units of Open Interest in the September month's future contract.