Weak IIP drags Nifty below 8,200 mark

Indian benchmark -- Nifty -- ended the Monday’s trade on pessimistic note with a cut of over a percentage point, as sentiments remained dampened with Industrial production shrinking an annual 1.9% in October, worsening from a 0.7% rise in the previous month and 9.8 per cent growth in the year-ago month. Traders also remained on sidelines ahead of domestic trade deficit data, November CPI inflation and WPI inflation to be announced later in the week, while globally Fed rate decision is awaited. Weak economic data coupled with the fear of rise in inflation with the surge in crude prices after OPEC and non-OPEC producers reached a deal on Saturday, too weighed down the sentiments.

Global cues too remained sluggish with European counters making weak start as investors started to focus on the US Federal Reserve's policy meeting later this week. Asian markets ended mostly in red in response to the first global oil deal since 2011 and Saudi’s readiness to do “whatever it takes” to rebalance the oil markets. Back on street, sentiments also remained dampened with the Centre and States failing to approve the GST laws on Sunday and agreeing to meet on December 22 and 23 to hammer out a consensus, dashing hopes that the crucial bills would be introduced in the ongoing winter session of Parliament and making it tough to meet the April 1 rollout date across the country. Markets participants shrugged off robust growth in November indirect tax collection. Net indirect tax collections grew 23.1 per cent in November from a year ago.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 7.47% and reached 16.19. The 50-share Nifty was down by 90.95 points or 1.10% to settle at 8,170.80.

Nifty December 2016 futures closed at 8183.40 on Monday at a premium of 12.60 points over spot closing of 8170.80, while Nifty January 2017 futures ended at 8217.70 at a premium of 46.90 points over spot closing. Nifty December futures saw a contraction of 0.65 million (mn) units, taking the total outstanding open interest (OI) to 16.50 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 0.20 points at 263.80 compared with spot closing of 264.00. The numbers of contracts traded were 15,081.

ICICI Bank December 2016 futures traded at a premium of 0.10 points at 265.00 compared with spot closing of 264.90. The numbers of contracts traded were 8,326.

Vedanta 2016 futures traded at a discount of 1.35 points at 244.65 compared with spot closing of 246.00. The numbers of contracts traded were 8,185.

Axis Bank December 2016 futures traded at a premium of 0.75 points at 445.55 compared with spot closing of 444.80. The numbers of contracts traded were 14,997.

HDFC Bank December 2016 futures traded at a discount of 0.60 points at 1185.40 compared with spot closing of 1186.00. The numbers of contracts traded were 7,210.

Among Nifty calls, 8300 SP from the December month expiry was the most active call with an addition of 0.53 million open interests. Among Nifty puts, 8000 SP from the December month expiry was the most active put with a contraction of 0.22 million open interests.

The respective Support and Resistance levels of Nifty are: Resistance 8216.15 --- Pivot Point 8185.30 --- Support --- 8139.95.             

The Nifty Put Call Ratio (PCR) finally stood at 1.19 for December month contract. The top five scrips with highest PCR on OI were Colgate-Palmolive (India) (2.52), Hero MotoCorp (1.60), Eicher Motors (1.48), Vedanta (1.39) and Apollo Hospitals Enterprise (1.30).   

Among most active underlying, State Bank of India witnessed a contraction of 0.97 million of Open Interest in the December month futures contract, followed by Vedanta witnessing an addition of 0.57 million of Open Interest in the December month contract, Axis Bank witnessed a contraction of 0.68 million of Open Interest in the December month contract, Sun TV Network witnessed an contraction of 0.18 million of Open Interest in the December month contract and Tata Steel witnessed an addition of 1.60 million units of Open Interest in the November month's future contract.