Nifty ends with marginal cut on US rate hike blues

The fifty stock index -- Nifty -- ended the volatile day of trade with a marginal cut on Friday, as overall sentiment remained dampened after U.S. Federal Reserve Chair Janet Yellen signalled an interest rate hike was imminent. Sharp plunge in the rupee against the dollar too dampened the market sentiments. India dropped below the 68-level against the dollar after nearly five months to trade at 68.18 during afternoon trade. The demonetisation effect also continued to weigh on the bourses with both the Lok Sabha and Rajya Sabha witnessed continued protests from the opposition about the demonetisation move. Also, fears have risen regarding production of the key commodities as farmers are not getting enough cash to buy seeds for winter crops due to demonetisation. However, losses remained capped with NITI Aayog Vice-Chairman Arvind Panagariya’s statement that India can become a $10 trillion economy in the next 15 years, like China did in last one and a half decade. He said there is much scope for India to benefit from Chinese experience in the manufacturing sector and make the country into a robust & steady economy.

Market participants were seen piling position in Oil & Gas, Realty and Power stocks, while selling was witnessed in Consumer Durables, Metal and FMCG 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 Petronet LNG, Engineers India and Union Bank of India. On the other hand, the top losers were Vedanta, Cairn India and Sun TV Network.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility slipping by 4.84% and reached 17.80. The 50-share Nifty was down by 5.85 points or 0.07% to settle at 8,074.10.

Nifty November 2016 futures closed at 8074.70 on Friday at a premium of 0.6 points over spot closing of 8,074.10, while Nifty December 2016 futures ended at 8121.25 at a premium of 47.15 points over spot closing. Nifty November futures saw a contraction of 1.33 million (mn) units, taking the total outstanding open interest (OI) to 17.45 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 premium of 1.15 points at 264.75 compared with spot closing of 263.60. The numbers of contracts traded were 12,081.

State Bank of India November 2016 futures traded at a premium of 0.30 points at 276.00 compared with spot closing of 275.70. The numbers of contracts traded were 16,246.

Punjab National Bank November 2016 futures traded at a premium of 0.35 points at 149.95 compared with spot closing of 149.60. The numbers of contracts traded were 9,412.

Vedanta November 2016 futures traded at a discount of 0.5 points at 203.85 compared with spot closing of 203.90. The numbers of contracts traded were 9,541.

Hindalco Industries November 2016 futures traded at a discount of 0.25 points at 165.95 compared with spot closing of 166.20. The numbers of contracts traded were 8,880.  

Among Nifty calls, 8200 SP from the November month expiry was the most active call with an addition of 0.34 million open interests. Among Nifty puts, 8000 SP from the November month expiry was the most active put with an addition of 0.38 million open interests. The maximum OI outstanding for Calls was at 9000 SP (5.08 mn) and that for Puts was at 8000 SP (5.73 mn). The respective Support and Resistance levels of Nifty are: Resistance 8119.27--- Pivot Point 8083.78--- Support --- 8038.62.             

The Nifty Put Call Ratio (PCR) finally stood at 0.62 for November month contract. The top five scrips with highest PCR on OI were JSW Steel (0.92), Cummins India (0.89), UBL (0.88), Oil India (0.88) and Bank of Baroda (0.86).   

Among most active underlying State Bank of India witnessed an addition of 2.97 million of Open Interest in the November month futures contract, followed Vedanta witnessing a contraction of 1.41 million of Open Interest in the November month contract, ICICI Bank witnessed a contraction of 0.20 million of Open Interest in the November month contract, Punjab National Bank witnessed a contraction of 1.55 million of Open Interest in the November month contract and Yes Bank witnessed a contraction of 0.27 million units of Open Interest in the November month's future contract.