Nifty skids lower for second day in a row; ends below 8100 level

The fifty stock index -- Nifty -- continued its southward journey for second consecutive day on Friday and finished the choppy day of trade with over a percent cut, on account of selling in the frontline blue chip counters amid weak global cues. Sentiments remained subdued on a private report indicating that Cash crunch post demonetisation is expected to slow India's GDP growth to 6.5% for the fourth quarter of 2016 and is likely to spill over into the first quarter of 2017. Investors remained on the sidelines and refrained from any buying activity ahead of the release of the US monthly jobs data, a referendum in Italy over its Constitution and the Reserve Bank of India's policy review next week. Fears of likely delay in GST implementation also caused selling pressure, while the RBI announcement on market stabilisation scheme (MSS) failed to cap the downside.

The top gainers from the F&O segment were Eicher Motors, Reliance Power and PTC India. On the other hand, the top losers were Bharat Financial Inclusion, Tata Communications and Sun TV Network. In the index option segment, maximum OI continues to be seen in the 8000-8600 calls and 7500-8000 puts indicating this is the trading range expectation. In today's session, the 8100 and 8200 Call strikes saw addition of 1.29 and 5.95 lakh shares, respectively. On the other hand, some traders exited from 8100, 8200 and 8300 puts on the back of profit booking.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 7.46% and reached 17.93. The 50-share Nifty was down by 106.10 points or 1.30% to settle at 8,086.80.

Nifty December 2016 futures closed at 8108.90 on Friday at a premium of 22.10 points over spot closing of 8086.80, while Nifty January 2017 futures ended at 8144.55 at a premium of 57.75 points over spot closing. Nifty December futures saw a contraction of 0.37 million (mn) units, taking the total outstanding open interest (OI) to 15.73 million (mn) units. The near month derivatives contract will expire on December 29, 2016.

From the most active contracts, SBI December 2016 futures traded at a discount of 1.20 points at 254.10 compared with spot closing of 255.30. The numbers of contracts traded were 20,178.

Tata Motors December 2016 futures traded at a premium of 2.00 points at 434.90 compared with spot closing of 432.90. The numbers of contracts traded were 14,680.

Maruti December 2016 futures traded at a premium of 12.15 points at 5080.25 compared with spot closing of 5068.10. The numbers of contracts traded were 13,626.

ICICI Bank December 2016 futures traded at a premium of 0.55 points at 260.05 compared with spot closing of 259.50. The numbers of contracts traded were 13,198.

Axis Bank December 2016 futures traded at a premium of 2.30 points at 462.25 compared with spot closing of 459.95. The numbers of contracts traded were 11,290.

Among Nifty calls, 8300 SP from the December month expiry was the most active call with a contraction of 0.23 million open interests. Among Nifty puts, 8000 SP from the December month expiry was the most active put with a contraction of 0.19 million open interests. The maximum OI outstanding for Calls was at 8300 SP (4.81 mn) and that for Puts was at 8000 SP (7.59 mn). The respective Support and Resistance levels of Nifty are: Resistance 8140.72 --- Pivot Point 8105.38 --- Support --- 8051.47.             

The Nifty Put Call Ratio (PCR) finally stood at 1.13 for December month contract. The top five scrips with highest PCR on OI were NIIT Tech (1.88), Hero MotoCorp (1.55), Marico (1.36), Eicher Motors (1.31) and Ajanta Pharma (1.22).   

Among most active underlying, State Bank of India witnessed a contraction of 1.17 million of Open Interest in the December month futures contract, followed by Maruti Suzuki India witnessing a contraction of 0.02 million of Open Interest in the December month contract, Tata Motors witnessed an addition of 1.95 million of Open Interest in the December month contract, ICICI Bank witnessed a contraction of 0.35 million of Open Interest in the December month contract and Vedanta witnessed a contraction of 1.14 million units of Open Interest in the November month's future contract.