Nifty extend southward journey for fourth straight day

Indian equity benchmark -- Nifty -- extended its southward journey for fourth straight day on Friday and ended the disappointing day of trade with a cut of over half a percent on account of weak global cues. After a cautious start market moved downside as traders turned cautious ahead of outcome of next week’s U.S. presidential election. Investors failed to get any sense of relief with the GST Council fixing a four-slab tax structure for GST implementation. The council finalized four-tier GST tax structure of 5, 12, 18 and 28 percent that aims to lower tax incidence on most goods and keep out essential items. Meanwhile, Chief Economic Advisor Arvind Subramanian has said that the GST Council’s decision to peg the tax rate on items of mass consumption at 5 per cent will bring down prices and soften inflation. Market extended its losses after European counters making feeble start,  as investors looked ahead to the U.S. jobs report due tonight for clues on the timing of a rate hike and US election outcome, while Asian market ended mostly in red.

Back home, Nifty ended the session below its crucial 8,450 level. On the sectoral front FMCG stocks edged higher, as the GST rate structure looked favourable for several companies in that space. However, Pharma stocks came under pressure with the report of the criminal probe carried out by the US Department of Justice that investigates price collusion charges. In scrip specific development, private explorer Reliance Industries (RIL) has been slapped with a notice of around $1.55 billion for commercially taking out natural gas that belonged to state-run firm ONGC.

The top gainers from the F&O segment were HCL Technologies, ITC and Colgate Palmolive (India). On the other hand, the top losers were Sun Pharmaceuticals Industries, Jindal Steel & Power and Kaveri Seed Company. In the index options segment, maximum OI was being seen in the 8400-9000 calls and 8200-8500 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility addition by 2.32% and reached 16.84. The 50-share Nifty was down by 51.20 points or 0.60% to settle at 8,433.75

Nifty November 2016 futures closed at 8458.20 on Friday at a premium of 24.45 points over spot closing of 8,433.75, while Nifty December 2016 futures ended at 8509.90 at a premium of 76.15 points over spot closing. Nifty November futures saw addition of 0.20 million (mn) units, taking the total outstanding open interest (OI) to 17.24 million (mn) units. The near month derivatives contract will expire on November 24, 2016.

From the most active contracts, SBI November 2016 futures traded at a premium of 0.80 points at 243.90 compared with spot closing of 243.10. The numbers of contracts traded were 12,790.

Vedanta November 2016 futures traded at a discount of 0.90 points at 212.00 compared with spot closing of 212.90. The numbers of contracts traded were 14,735.

ITC November 2016 futures traded at a premium of 1.25 points at 249.10 compared with spot closing of 247.85. The numbers of contracts traded were 15,828.

Axis Bank India November 2016 futures traded at a premium of 1.15 points at 479.15 compared with spot closing of 478.00. The numbers of contracts traded were 15,747.   

Hindalco Industries November 2016 futures traded at a discount of 0.05 points at 159.10 compared with spot closing of 159.15. The numbers of contracts traded were 12,935.  

Among Nifty calls, 8600 SP from the November month expiry was the most active call with a addition of 0.27 million open interests. Among Nifty puts, 8400 SP from the November month expiry was the most active put with an addition of 0.33 million open interests. The maximum OI outstanding for Calls was at 9000 SP (6.00 mn) and that for Puts was at 8200 SP (4.68 mn). The respective Support and Resistance levels of Nifty are: Resistance 8491.75--- Pivot Point 8446.00--- Support --- 8388.00.             

The Nifty Put Call Ratio (PCR) finally stood at 0.90 for November month contract. The top five scrips with highest PCR on OI were INDUSINDBK (1.06), GODREJCP (1.00), CENTURYTEX (0.98), CUMMINSIND (0.96) and SIEMENS (0.92).   

Among most active underlying Vedanta witnessed an contraction of 3.63 million of Open Interest in the November month futures contract, followed Sun Pharmaceuticals witnessing an addition of 2.14 million of Open Interest in the November month contract, SBI witnessed a addition of 0.52 million of Open Interest in the November month contract, Maruti Suzuki India witnessed an contraction of 0.07 million of Open Interest in the November month contract and Reliance Industries witnessed an addition of 0.30 million units of Open Interest in the November month's future contract.