Nifty end lower on penultimate session of F&O expiry

Wednesday’s session turned out to be a daunting session of trade for Nifty which ended with a cut of almost a percent amid weak global cues. After a gap-down opening, market traded in a tight band, as traders opted to remain on sidelines ahead of October’s expiry in the derivatives segment on Thursday. Sentiments also remained subdued with report that despite many efforts, India moved up only one position in the International Finance Corporation’s (IFC) ease of doing business rankings. The Doing Business 2017 report showed that India was placed 130th among 190 countries that had been surveyed for the annual rankings, with Russia, Bhutan, South Africa, China, Nepal, Sri Lanka and Brazil ranking higher. Disappointing earnings by some heavyweights too dampened sentiments. Market extended losses in late trade, as investors around the world remained nervous given the US election next month, the Federal Reserve's policy meeting in December, and over the health of China's economy. Sentiments weighed down with the statement of Union Minister Nirmala Sitharaman expressing disappointment at India's rank remaining low in terms of ease of doing business. She said that the efforts and reforms undertaken by the Centre and states have not been adequately captured in the ranking released by the World Bank. Investors shrugged off the Economic Affairs Secretary Shaktikanta Das’s statement that the GDP growth will be around 8 percent this fiscal, while the agriculture sector is expected to grow over 4 percent. Traders also failed to get any solace with NITI Aayog Vice-Chairman Arvind Panagariya’s statement that the Indian economy has the potential to touch $ 6-8 trillion in the next 15 years, as against $ 2 trillion at present. Finally, Nifty ended the session near intraday lows with a cut of over a fifty points.

On the global front, European shares fell maintaining a gloomy trend set in Asia and the United States and with concerns about a global glut of oil looming over the market. Asian markets ended mostly lower on Wednesday, as there were fresh fears after reports emerged that Russia will not take part in a planned oil output cut by major producers.

The top gainers from the F&O segment were GMR Infrastructure, Idea Cellular and Dabur India. On the other hand, the top losers were Axis Bank, Jubilant Foodworks and Tata Motors. In the index options segment, maximum OI was being seen in the 8600-8800 calls and 8500-8700 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility contraction by 0.21% and reached 14.45. The 50-share Nifty was down by 76.05 points or 0.88% to settle at 8,615.25

Nifty October 2016 futures closed at 8616.75 on Wednesday at a premium of 9.05 points over spot closing of 8,615.25, while Nifty November 2016 futures ended at 8658.00 at a premium of 42.75 points over spot closing. Nifty October futures saw contraction of 1.65 million (mn) units, taking the total outstanding open interest (OI) to 12.37 million (mn) units. The near month derivatives contract will expire on October 27, 2016.

From the most active contracts, SBI October 2016 futures traded at a premium of 2.10 points at 259.10 compared with spot closing of 257.00. The numbers of contracts traded were 21,640.

ICICI Bank October 2016 futures traded at a premium of 0.15 points at 278.80 compared with spot closing of 278.65. The numbers of contracts traded were 23,962.

ITC October 2016 futures traded at a premium of 0.35 points at 239.25 compared with spot closing of 238.90. The numbers of contracts traded were 25,382.

Axis Bank October 2016 futures traded at a premium of 1.90 points at 487.15 compared with spot closing of 485.25. The numbers of contracts traded were 47,660.   

Tata Steel October 2016 futures traded at a premium of 6.30 points at 399.20 compared with spot closing of 392.90. The numbers of contracts traded were 17,712.   

Among Nifty calls, 8700 SP from the October month expiry was the most active call with a addition of 1.23 million open interests. Among Nifty puts, 8600 SP from the October month expiry was the most active put with an contraction of 1.28 million open interests. The maximum OI outstanding for Calls was at 8800 SP (6.08 mn) and that for Puts was at 8500 SP (5.07 mn). The respective Support and Resistance levels of Nifty are: Resistance 8649.50--- Pivot Point 8623.05--- Support --- 8588.80.             

The Nifty Put Call Ratio (PCR) finally stood at 0.87 for October month contract. The top five scrips with highest PCR on OI were MRF (2.46), LT (1.42), ARVIND (1.33), ICICIBANK  (1.29) and DRREDDY (1.29).   

Among most active underlying Axis Bank witnessed an contraction of 8.16 million of Open Interest in the October month futures contract, followed SBI witnessing an contraction of 12.97 million of Open Interest in the October month contract, ICICI Bank witnessed a contraction of 9.66 million of Open Interest in the October month contract, Tata Steel witnessed an contraction of 4.12 million of Open Interest in the October month contract and Tata Motors witnessed an contraction  of 3.25 million units of Open Interest in the October month's future contract.