Nifty witnesses bloodbath as Fed signals another rate hike this year

Thursday’s session turned out to be a daunting session of trade for Nifty which ended with a cut of over one and half percent, breaching its crucial 8,600 level, as investors indulged in trimming their bets after the minutes of the US Federal Reserve’s September meeting indicated a possible rate hike this year. After a gap down opening, market never looked confident throughout the session to end near intraday lows, as sentiments remained down-beat after Industrial production data contracted once again for the month of August and China’s steel exports declined unexpectedly. Investor shrugged off report that the government’s revenue collection in April to September -- the first half of the current fiscal -- saw indirect tax-mop up growing at an impressive 26 percent. The total direct and indirect tax collections at the end of September stood at Rs 7.35 lakh crore, almost half the Rs 16.26 lakh crore target for 2016-17. Traders also remained cautious ahead of wholesale price index (WPI) due on Friday.

On the global front, stocks in Europe traded lower, with technology shares getting hit after Ericsson AB tumbled in the wake of a profit warning, while energy stocks followed a selloff in oil prices. Asian markets ended lower on Thursday, as investors turned cautious after China’s September trade data showed a sharp decline in exports, raising fresh concerns about the health of the world's second-biggest economy.

The top gainers from the F&O segment were Just Dial, Petronet LNG and Cadila Healthcare. On the other hand, the top losers were TV18 Broadcast, JSW Energy and Dish TV India. 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 7.98% and reached 15.42. The 50-share Nifty was down by 135.45 points or 1.56% to settle at 8,573.35

Nifty October 2016 futures closed at 8580.45 on Thursday at a premium of 7.10 points over spot closing of 8,573.35, while Nifty November 2016 futures ended at 8621.70 at a premium of 48.35 points over spot closing. Nifty October futures saw contraction of 1.43 million (mn) units, taking the total outstanding open interest (OI) to 19.80 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 0.10 points at 249.85 compared with spot closing of 249.95. The numbers of contracts traded were 14,184.

ICICI Bank October 2016 futures traded at a premium of 0.65 points at 242.25 compared with spot closing of 241.60. The numbers of contracts traded were 14,085.

Axis Bank October 2016 futures traded at a premium of 3.45 points at 520.85 compared with spot closing of 517.40. The numbers of contracts traded were 13,766.

Tata Motors October 2016 futures traded at a premium of 1.80 points at 545.80 compared with spot closing of 544.00. The numbers of contracts traded were 10,559.   

Tata Steel October 2016 futures traded at a premium of 0.30 points at 415.10 compared with spot closing of 414.80. The numbers of contracts traded were 22,401.  

Among Nifty calls, 8700 SP from the October month expiry was the most active call with a addition of 1.02 million open interests. Among Nifty puts, 8600 SP from the October month expiry was the most active put with an contraction of 0.40 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.65 mn) and that for Puts was at 8500 SP (4.81 mn). The respective Support and Resistance levels of Nifty are: Resistance 8656.15--- Pivot Point 8598.75--- Support --- 8515.95.             

The Nifty Put Call Ratio (PCR) finally stood at 0.93 for October month contract. The top five scrips with highest PCR on OI were OFSS (2.00), APOLLOHOSP (1.80), MRF (1.33), MARUTI (1.10) and LT (1.05).   

Among most active underlying Tata Steel witnessed an contraction of 1.95 million of Open Interest in the October month futures contract, followed Infosys witnessing an addition of 0.07 million of Open Interest in the October month contract, State Bank of India witnessed a addition  of 0.70 million of Open Interest in the October month contract, Reliance Industries witnessed an addition of 0.47 million of Open Interest in the October month contract and TCS witnessed an addition  of 0.44 million units of Open Interest in the October month's future contract.