Nifty ends in red; settle below 8450 mark

Indian benchmark -- Nifty -- ended the session with over a percent cut on Wednesday as investors turned jittery after Donald Trump was announced as the winner in the US elections to become the 45th president of the United States. Though market made smart recovery in second half of the session, but it failed to end the session in positive territory. Sentiment remained down beat with the Prime Minister Narendra Modi’s announcement that 500 and 1,000 rupee banknotes would be withdrawn from circulation at midnight to crack down on rampant corruption and counterfeit currency. The surprise move was designed to bring billions of dollars worth of cash in unaccounted wealth into the mainstream economy, but this move will adversely impact the country’s economy in near term, given that about 40% of the economy is driven by small- and medium-sized enterprises that largely depend on cash transactions. Sectors like real estate, construction material, and jewellery that use more of black money will take a big knock, while e-commerce sector having cash on delivery may feel impact on sales. However, investors got some comfort with the report that a new and simpler portal for the incoming Goods and Services Tax regime went live on Tuesday that will enable easy filing of returns and tax payments through credit/debit cards and other modes.

On the global front, European counters made a feeble start and all the Asian counterparts ended in negative terrain, as investors faced the real possibility of a shock win by Republican Donald Trump that could upend the global political order. Back home, traders were seen buying in Pharma, Banking and Oil & Gas stocks, while selling was witnessed in Realty, Consumer Durables and IT sector stocks.

The top gainers from the F&O segment were Dr. Reddy's Laboratories, The Karnataka Bank and Sun Pharmaceuticals Industries. On the other hand, the top losers were Indiabulls Real Estate, Housing Development and Infrastructure and DLF. In the index options segment, maximum OI was being seen in the 8300-9000 calls and 8200-8500 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility contraction by 0.89% and reached 16.62. The 50-share Nifty was down by 111.55 points or 1.31% to settle at 8,432.00

Nifty November 2016 futures closed at 8462.70 on Wednesday at a premium of 30.70 points over spot closing of 8,432.00, while Nifty December 2016 futures ended at 8515.95 at a premium of 83.95 points over spot closing. Nifty November futures saw addition of 0.65 million (mn) units, taking the total outstanding open interest (OI) to 16.67 million (mn) units. The near month derivatives contract will expire on November 24, 2016.

From the most active contracts, State Bank of India November 2016 futures traded at a discount of 0.10 points at 260.70 compared with spot closing of 260.80. The numbers of contracts traded were 29,728.

ICICI Bank November 2016 futures traded at a discount of 0.15 points at 282.35 compared with spot closing of 282.50. The numbers of contracts traded were 34,059.

Axis Bank November 2016 futures traded at a premium of 0.30 points at 489.60 compared with spot closing of 489.30. The numbers of contracts traded were 20,135.

Sun Pharmaceuticals Industries November 2016 futures traded at a discount of 3.15 points at 662.85 compared with spot closing of 666.00. The numbers of contracts traded were 33,738.   

HDFC Bank November 2016 futures traded at a premium of 1.17 points at 1256.80 compared with spot closing of 1,255.10. The numbers of contracts traded were 17,056. 

Among Nifty calls, 8600 SP from the November month expiry was the most active call with a contraction of 0.15 million open interests. Among Nifty puts, 8200 SP from the November month expiry was the most active put with an addition of 0.53 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.85 mn) and that for Puts was at 8200 SP (5.65 mn). The respective Support and Resistance levels of Nifty are: Resistance 8604.72--- Pivot Point 8303.48--- Support --- 8130.77.       

The Nifty Put Call Ratio (PCR) finally stood at 1.00 for November month contract. The top five scrips with highest PCR on OI were UBL (1.07), CUMMINSIND (1.04), INDUSINDBK (0.91), MARICO (0.89) and BATAINDIA (0.87).   

Among most active underlying ICICI Bank witnessed an addition of 0.86 million of Open Interest in the November month futures contract, followed SBI witnessing an addition of 1.97 million of Open Interest in the November month contract, Vedanta witnessed a contraction of 4.06 million of Open Interest in the November month contract, Yes Bank witnessed an addition of 0.01 million of Open Interest in the November month contract and Tata Motors witnessed an contraction of 1.05 million units of Open Interest in the November month's future contract.