Nifty settles at six-month lows on persistent selling

The fifty stock index -- Nifty -- ended the volatile day of trade with a marginal cut on Thursday as investors remained anxious, over the economic impact of demonetization and keeping an eye on Parliament’s winter session where the government is unlikely to bring three bills related to GST in the coming days. Both Houses of Parliament had a rocky start to the winter session as the government and the Opposition again locked horns over a move to scrap two high-value banknotes that has triggered chaos and confusion across the country. Lack of clarity on Trump’s policies which may lead to fall in foreign flows in India also kept the market cautious. Foreign Institutional Investors (FIIs) and foreign portfolio investors (FPIs) have sold equity shares worth over $1 billion in the past five trading days. The street failed to draw solace with Moody’s Investors Service affirming India’s sovereign rating at ‘Baa3’ with a positive outlook, saying it expects policymakers to continue reforms to achieve balanced growth and reduce the government's debt load. Moody's further said that India's policy makers have taken important steps to strengthen the country's institutions. Investors remained on the sidelines and refrained from any buying activity ahead of inflation, jobs and exports data expected from the US and testimony from Federal Reserve Chairwoman Janet Yellen on the economic outlook to Congress later in the day.

Market participants were seen piling position in Power, Metal and Oil & Gas stocks, while selling was witnessed in IT, Telecom and Capital Goods sector stocks. Coming to F&O market internals, in the index options segment, maximum OI continues to be seen in the 8300-8800 calls and 7800-8200 puts indicating the expected trading range. The top gainers from the F&O segment were PC Jeweller, Hindustan Zinc and DLF. On the other hand, the top losers were Voltas, BEML and Ambuja Cements.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility slipping by 4.06% and reached 18.71. The 50-share Nifty was down by 31.65 points or 0.39% to settle at 8,079.95.

Nifty November 2016 futures closed at 8088.35 on Thursday at a premium of 8.40 points over spot closing of 8,079.95, while Nifty December 2016 futures ended at 8141.10 at a premium of 61.15 points over spot closing. Nifty November futures saw a contraction of 0.09 million (mn) units, taking the total outstanding open interest (OI) to 18.79 million (mn) units. The near month derivatives contract will expire on November 24, 2016.

From the most active contracts, ICICI Bank November 2016 futures traded at a discount of 0.20 points at 268.00 compared with spot closing of 268.20. The numbers of contracts traded were 17,900.

State Bank of India November 2016 futures traded at a discount of 0.45 points at 278.25 compared with spot closing of 278.70. The numbers of contracts traded were 16,574.

Vedanta November 2016 futures traded at a discount of 0.30 points at 213.60 compared with spot closing of 213.90. The numbers of contracts traded were 11,118.

Bank of Baroda November 2016 futures traded at a discount of 0.10 points at 175.20 compared with spot closing of 175.30. The numbers of contracts traded were 14,042.

Tata Motors November 2016 futures traded at a premium of 0.95 points at 475.95 compared with spot closing of 475.00. The numbers of contracts traded were 11,661.  

Among Nifty calls, 8200 SP from the November month expiry was the most active call with an addition of 0.77 million open interests. Among Nifty puts, 8100 SP from the November month expiry was the most active put with an addition of 0.01 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.31 mn) and that for Puts was at 8200 SP (3.30 mn). The respective Support and Resistance levels of Nifty are: Resistance 8134.03 --- Pivot Point 8097.17 --- Support --- 8043.08.             

The Nifty Put Call Ratio (PCR) finally stood at 0.67 for November month contract. The top five scrips with highest PCR on OI were Cummins India (0.92), UBL (0.89), Oil India (0.88), JSW Steel (0.88) and Power Grid (0.80).   

Among most active underlying State Bank of India witnessed an addition of 0.13 million of Open Interest in the November month futures contract, followed Vedanta witnessing an addition of 1.30 million of Open Interest in the November month contract, Yes Bank witnessed a contraction of 0.16 million of Open Interest in the November month contract, ICICI Bank witnessed an addition of 1.99 million of Open Interest in the November month contract and Tata Motors witnessed a contraction of 0.91 million units of Open Interest in the November month's future contract.