Nifty erases initial gains to end flat

Erasing all of its initial gains, the local benchmark -- Nifty -- ended the volatile day of unchanged on Tuesday. After making a cautious start, market gained momentum in afternoon deals, as traders took some encouragement with Core sector output rising to three months high by 5 per cent in September, compared to growth of 2.4 per cent in the year-ago period, on the back of a sustained growth in the steel sector and a rise in refinery products. Also, a private report has said that the Indian economy is well-prepared, even if not completely immune, for any external risk in case the US Federal Reserve normalises rates in December. Buying got intensified after the Nikkei Markit India Manufacturing Purchasing Managers’ Index (PMI) - a gauge of manufacturing performance - rose to 54.4 in October from 52.1 in September, indicative of a robust improvement in manufacturing business conditions in the country.

Also, investor got some comfort with the ASSOCHAM report stating Indian economy is expected to fare better in the second half of the current fiscal backed by uptick in sales and improved capacity utilization, though fresh investments and new jobs creation may be a concern going forward. However, market participants booked all of their profit in last leg of trade, as investors turned cautious ahead of US elections which is due next week and US Federal Reserve meeting which starts today. Finally, Nifty ended the Tuesday’s trade absolutely flat.

On the global front, European stocks were trading in green as upbeat Chinese data lifted market sentiment and investors focused on a fresh batch of earnings reports. Asian markets ended mostly in red.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility addition by 1.58% and reached 15.73. The 50-share Nifty was up by 0.55 points or 0.01% to settle at 8,626.25 

Nifty November 2016 futures closed at 8651.75 on Tuesday at a premium of 25.50 points over spot closing of 8,626.25, while Nifty December 2016 futures ended at 8704.25 at a premium of 78.00 points over spot closing. Nifty November futures saw contraction of 0.38 million (mn) units, taking the total outstanding open interest (OI) to 17.36 million (mn) units. The near month derivatives contract will expire on November 24, 2016.

From the most active contracts, Ashok Leyland November 2016 futures traded at a premium of 0.10 points at 90.40 compared with spot closing of 90.30. The numbers of contracts traded were 9,319.

SBI November 2016 futures traded flat at 259.40. The numbers of contracts traded were 11,306.

Vedanta November 2016 futures traded at a discount of 1.75 points at 218.50 compared with spot closing of 220.25. The numbers of contracts traded were 23,585.

Axis Bank India November 2016 futures traded at a premium of 2.75 points at 477.85 compared with spot closing of 475.10. The numbers of contracts traded were 11,538.   

Hindalco Industries November 2016 futures traded at a premium of 0.40 points at 157.30 compared with spot closing of 156.90. The numbers of contracts traded were 14,292.   

Among Nifty calls, 8800 SP from the November month expiry was the most active call with a addition of 0.23 million open interests. Among Nifty puts, 8600 SP from the November month expiry was the most active put with an addition of 0.26 million open interests. The maximum OI outstanding for Calls was at 9000 SP (4.73 mn) and that for Puts was at 8500 SP (4.22 mn). The respective Support and Resistance levels of Nifty are: Resistance 8659.07--- Pivot Point 8636.78--- Support --- 8603.97.             

The Nifty Put Call Ratio (PCR) finally stood at 1.01 for November month contract. The top five scrips with highest PCR on OI were UBL (1.70), ACC (1.23), CUMMINSIND (1.13), TATACOMM (1.12) and CENTURYTEX (1.05).   

Among most active underlying Vedanta witnessed an addition of 10.39 million of Open Interest in the November month futures contract, followed Century Textiles & Industries witnessing an addition of 0.70 million of Open Interest in the November month contract, Maruti Suzuki India witnessed a contraction of 0.14 million of Open Interest in the November month contract, Tata Steel witnessed an addition of 0.53 million of Open Interest in the November month contract and SBI witnessed an addition of 2.99 million units of Open Interest in the November month's future contract.