Nifty give up its 8000 mark

The local benchmark, Nifty declined for the seventh session in a row on Thursday, its longest losing streak in one-and-a-half years, on fears of a likely hit to corporate earnings due to currency recall and absence of any major trigger. Sentiments remained subdued with Prime Minister Narendra Modi’s top economic adviser Bibek Debroy’s statement that the negative shock from demonetisation will last until the end of March, though he also said that improved growth next year should fully compensate for the loss. Also, the minutes of the December 6 and 7 meeting of the Monetary Policy Committee (MPC) showed that most members think the withdrawal of high denomination notes could transiently interrupt industrial activity in the short term.

The top gainers from the F&O segment were BEML, PC Jeweller and Jain Irrigation Systems. On the other hand, the top losers were Jindal Steel & Power, Bharat Financial Inclusion and Reliance Communications. In the index option segment, maximum OI continues to be seen in the 8200-8500 calls and 7500-8000 puts indicating this is the trading range expectation.

The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 5.76% and reached 15.55. The 50-share Nifty was down by 82.20 points or 1.02% to settle at 7979.10.

Nifty December 2016 futures closed at 7996.85 on Thursday at a premium of 17.75 points over spot closing of 7979.10, while Nifty January 2017 futures ended at 8030.00 at a premium of 50.90 points over spot closing. Nifty December futures saw a contraction of 1.38 million (mn) units, taking the total outstanding open interest (OI) to 12.89 million (mn) units. The near month derivatives contract will expire on December 29, 2016.

From the most active contracts, State Bank of India December 2016 futures traded at a premium of 0.70 points at 250.50 compared with spot closing of 249.80. The numbers of contracts traded were 13,901.

Sun Pharmaceuticals Industries December 2016 futures traded at a premium of 1.55 points at 611.35 compared with spot closing of 609.80. The numbers of contracts traded were 10,092.

Tata Motors December 2016 futures traded at a premium of 0.30 points at 471.15 compared with spot closing of 470.85. The numbers of contracts traded were 9,884.

Bharat Financial Inclusion December 2016 futures traded at a premium of 3.15 points at 555.85 compared with spot closing of 552.70. The numbers of contracts traded were 9,684.

Vedanta December 2016 futures traded at a premium of 0.45 points at 217.30 compared with spot closing of 216.85. The numbers of contracts traded were 8,240.

Among Nifty calls, 8100 SP from the December month expiry was the most active call with an addition of 0.44 million open interests. Among Nifty puts, 8000 SP from the December month expiry was the most active put with a contraction of 0.46 million open interests. The maximum OI outstanding for Calls was at 8300 SP (5.66 mn) and that for Puts was at 8000 SP (6.25 mn). The respective Support and Resistance levels of Nifty are: Resistance 8028.72--- Pivot Point 7996.83--- Support --- 7947.22.            

The Nifty Put Call Ratio (PCR) finally stood at 0.92 for December month contract. The top five scrips with highest PCR on OI were Godrej Consumer Products (17.75), DCB Bank (3.27), Colgate-Palmolive (India) (2.40), Marico (1.51) and Indo Count Industries (1.25).   

Among most active underlying, Vedanta witnessed a contraction of 4.22 million of Open Interest in the December month futures contract, followed by State Bank of India witnessing a contraction of 1.84 million of Open Interest in the December month contract, Tata Steel witnessed a contraction of 1.53 million of Open Interest in the December month contract, Yes Bank witnessed a contraction of 0.41 million of Open Interest in the December month contract and Tata Motors witnessed a contraction of 2.61  million units of Open Interest in the November month's future contract.