Nifty crash like house of cards; tumbles below 8,300 mark

Indian benchmark -- Nifty -- finished the session with a cut of over two and a half percent, as traders opted to book profit after yesterday’s huge rally, ahead of Index of Industrial Production (IIP) data for the month of September slated to be released later in the day. After a gap down opening, market never looked confident during the session to end near intraday lows, as sentiment remained downbeat after US bond yields spiked and most Asian markets edged lower amid fears that policies of President-elect Donald Trump, if implemented, will stoke inflation in the US, trigger a hike in rates and lead to a flight of capital from the emerging markets (EMs). Sentiment also weighed down with the Finance Minister Arun Jaitley’s statement where he hinted to a probable delay in the rollout of the indirect tax regime. Investors failed to get any sense of relief with NITI Aayog vice chairman Arvind Panagariya’s statement that the government's recent move to demonetize Rs 500 and Rs 1000 rupee notes could lead to moderation in inflation unless there is tangible action from the Reserve Bank of India (RBI). Market participants remained on sideline given the demonetisation of Rs 500 and Rs 1000 notes by the government earlier this week. Stocks from the real estate, gems & jewellery and consumption related segments continued to weigh on the overall market sentiment.

Weakness in Global equity markets too dampened sentiments. European markets trading mostly in red amid expectations that President-elect Donald Trump's attempts to boost the economy with fiscal stimulus may fuel inflation and prompt the Federal Reserve to raise interest rates far faster than expected. Asian markets ended mostly lower on Friday as oil prices eased on skepticism regarding OPEC's ability to rebalance crude supply.

The top gainers from the F&O segment were Indiabulls Real Estate, Siemens and Sun Pharmaceuticals Industries. On the other hand, the top losers were Mahindra & Mahindra Financial Services, Century Textiles & Industries and DHFL. In the index options segment, maximum OI was being seen in the 8200-9000 calls and 8200-8400 puts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility addition by 12.34% and reached 17.36. The 50-share Nifty was down by 229.45 points or 2.69% to settle at 8,296.30

Nifty November 2016 futures closed at 8327.95 on Friday at a premium of 31.65 points over spot closing of 8,296.30, while Nifty December 2016 futures ended at 8381.15 at a premium of 84.85 points over spot closing. Nifty November futures saw addition of 0.49 million (mn) units, taking the total outstanding open interest (OI) to 17.51 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 0.05 points at 273.90 compared with spot closing of 273.95. The numbers of contracts traded were 54,461.

ICICI Bank November 2016 futures traded at a discount of 0.35 points at 277.65 compared with spot closing of 278.00. The numbers of contracts traded were 23,632.

PNB November 2016 futures traded at a premium of 0.10 points at 156.35 compared with spot closing of 156.25. The numbers of contracts traded were 15,007.

Bank of Baroda November 2016 futures traded at a discount of 1.00 points at 161.35 compared with spot closing of 162.35. The numbers of contracts traded were 13,327.    Axis Bank November 2016 futures traded at a premium of 4.15 points at 499.60 compared with spot closing of 495.45. The numbers of contracts traded were 16,405.   

Among Nifty calls, 8500 SP from the November month expiry was the most active call with a addition of 2.31 million open interests. Among Nifty puts, 8300 SP from the November month expiry was the most active put with an addition of 0.29 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.93 mn) and that for Puts was at 8200 SP (4.85 mn). The respective Support and Resistance levels of Nifty are: Resistance 8409.62--- Pivot Point 8347.28--- Support --- 8233.97.             

The Nifty Put Call Ratio (PCR) finally stood at 0.79 for November month contract. The top five scrips with highest PCR on OI were UBL (1.04), VEDL (0.93), CUMMINSIND (0.92), INDUSINDBK (0.92) and JSWSTEEL (0.89).   

Among most active underlying SBI witnessed an contraction of 0.03 million of Open Interest in the November month futures contract, followed ICICI Bank witnessing an addition of 6.52 million of Open Interest in the November month contract, Yes Bank witnessed a addition of 0.40 million of Open Interest in the November month contract, Tata Steel witnessed an contraction of 1.67 million of Open Interest in the November month contract and Maruti Suzuki India witnessed an addition of 0.21 million units of Open Interest in the November month's future contract.