Nifty skids lower for third day in a row; ends below 8150 level

Indian benchmark index--Nifty-- declined for third consecutive session on Friday, as sentiments remained subdued after the US Federal Reserve signalled more rate hikes than expected next year. Investors turned jittery on the report that India's trade deficit widened to $13 billion in November, the highest since July 2015 and sharply wider than the $10.41 billion gap in October, as imports, including purchases of gold, outpaced exports of goods. However, losses remained capped with the report that more than 1,700 new foreign portfolio investors (FPIs) have registered with capital markets watchdog SEBI in the first seven months of the current fiscal, a sign of their willingness to be a part of India’s growth story in the long term. FPIs consider India as a preferred and stable market, given its macro-economic stability, long-term growth prospects and ongoing economic and social reforms.

Traders were seen piling up positions in Consumer Durables, IT and Auto stocks, while selling was witnessed in Metal, Oil & Gas and PSU sector stocks. The top gainers from the F&O segment were Biocon, Glenmark Pharmaceuticals and Tata Communications. On the other hand, the top losers were Havells India, Hindalco Industries and Apollo Tyres. In the index option segment, maximum OI continues to be seen in the 8200-8500 calls and 7800-8200 puts indicating this is the trading range expectation.

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The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 2.57% and reached 15.25. The 50-share Nifty was down by 14.15 points or 0.17% to settle at 8,139.45.

Nifty December 2016 futures closed at 8146.50 on Friday at a premium of 7.05 points over spot closing of 8139.45, while Nifty January 2017 futures ended at 8181.70 at a premium of 42.25 points over spot closing. Nifty December futures saw an addition of 0.98 million (mn) units, taking the total outstanding open interest (OI) to 16.56 million (mn) units. The near month derivatives contract will expire on December 29, 2016.

From the most active contracts, Axis Bank December 2016 futures traded at a premium of 0.15 points at 472.95 compared with spot closing of 472.80. The numbers of contracts traded were 16,241.

Sun Pharma December 2016 futures traded at a premium of 1.30 points at 648.65 compared with spot closing of 647.35. The numbers of contracts traded were 16,061.

Auro Pharma 2016 futures traded at a premium of 1.60 points at 692.25 compared with spot closing of 690.65. The numbers of contracts traded were 14,842.

Tata Motors December 2016 futures traded at a discount of 0.85 points at 472.30 compared with spot closing of 473.15. The numbers of contracts traded were 10,043.

ICICI Bank December 2016 futures traded at a premium of 0.90 points at 256.50 compared with spot closing of 255.60. The numbers of contracts traded were 9,871.

Among Nifty calls, 8200 SP from the December month expiry was the most active call with an addition of 0.08 million open interests. Among Nifty puts, 8100 SP from the December month expiry was the most active put with a contraction of 0.01 million open interests. The maximum OI outstanding for Calls was at 8300 SP (5.82 mn) and that for Puts was at 8000 SP (7.55 mn). The respective Support and Resistance levels of Nifty are: Resistance 8169.62--- Pivot Point 8148.53--- Support --- 8118.37.             

The Nifty Put Call Ratio (PCR) finally stood at 1.12 for December month contract. The top five scrips with highest PCR on OI were Godrej Consumer Products (17.50), DCB Bank (2.84), Marico (2.45), Colgate-Palmolive (2.29) and UBL (1.36).    

Among most active underlying, Vedanta witnessed a contraction of 1.37 million of Open Interest in the December month futures contract, followed by Axis Bank witnessing a contraction of 1.27 million of Open Interest in the December month contract, Yes Bank witnessed an addition of 0.06 million of Open Interest in the December month contract, State Bank of India witnessed a contraction of 0.20 million of Open Interest in the December month contract and Tata Steel witnessed a contraction of 0.32 million units of Open Interest in the November month's future contract.