Nifty pares all its early gains; ends flat

Paring all its early gains, Indian benchmark Nifty ended flat on Wednesday as traders remained cautious ahead of the expiry of futures and options contracts of the December series due tomorrow. Continuing Tuesday’s momentum, it inched higher in the first half of the session on favourable global cues. Investors also got some comfort with the report that India Inc raised Rs. 38,645 crore in November through private placement of corporate debt bonds, a surge of 57% from the year-ago level, for business expansion and propping up working capital requirements. However, the index lost all its gain in final hour of session and ended flat. Continuous selling by foreign portfolio investors (FPIs) coupled with rupee depreciation against dollar inversely affected market sentiments.

Traders were seen piling up positions in Media, Realty and Pharma stocks, while selling was witnessed in PSU Bank, Metal and Auto sector stocks. The top gainers from the F&O segment were Bharat Financial Inclusion, MindTree and Divi's Laboratories. On the other hand, the top losers were IDFC Bank, PC Jeweller and Apollo Tyres. In the index option segment, maximum OI continues to be seen in the 8000-8500 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 3.05% and reached 15.54. The 50-share Nifty was up by 2 points or 0.02% to settle at 8,034.85.

Nifty December 2016 futures closed at 8031.35 on Wednesday at a discount of 3.50 points over spot closing of 8034.85, while Nifty January 2017 futures ended at 8056.25 at a premium of 21.40 points over spot closing. Nifty December futures saw a contraction of 2.72 million (mn) units, taking the total outstanding open interest (OI) to 10.56 million (mn) units. The near month derivatives contract will expire on December 29, 2016.

From the most active contracts, Sun Pharmaceuticals Industries December 2016 futures traded at a premium of 0.60 points at 622.00 compared with spot closing of 621.40. The numbers of contracts traded were 18,385.

State Bank of India December 2016 futures traded at a premium of 0.05 points at 247.65 compared with spot closing of 247.60. The numbers of contracts traded were 16,639.

Idea Cellular December 2016 futures traded flat at 71.40 compared with spot closing. The numbers of contracts traded were 15,675.

Axis Bank December 2016 futures traded at a premium of 1.00 points at 439.70 compared with spot closing of 438.70. The numbers of contracts traded were 14,819.

ICICI Bank December 2016 futures traded at a discount of 0.20 points at 251.60 compared with spot closing of 251.80. The numbers of contracts traded were 13,927.

Among Nifty calls, 8100 SP from the December month expiry was the most active call with a contraction of 0.30 million open interests. Among Nifty puts, 8000 SP from the December month expiry was the most active put with an addition of 1.01 million open interests. The maximum OI outstanding for Calls was at 8200 SP (5.33 mn) and that for Puts was at 8000 SP (6.44 mn). The respective Support and Resistance levels of Nifty are: Resistance 8080.80 --- Pivot Point 8054.60--- Support --- 8008.65.

The Nifty Put Call Ratio (PCR) finally stood at 0.96 for December month contract. The top five scrips with highest PCR on OI were Godrej Consumer Products (95.25), DCB Bank (3.37), Colgate-Palmolive (India) (2.42), Mcleod Russel India (2.31) and KPIT Technologies (2.27).

Among most active underlying, State Bank of India witnessed a contraction of 10.05 million of Open Interest in the December month futures contract, followed by Vedanta witnessing a contraction 7.95 million of Open Interest in the December month contract, Maruti Suzuki India witnessed a contraction of 0.40 million of Open Interest in the December month contract, Yes Bank witnessed a contraction of 1.74  million units of Open Interest in the December month future contract and ICICI Bank witnessed a contraction of 13.76  million units of Open Interest in the December month future contract.