Nifty snaps two days gaining streak; ends below 8350 mark

Indian equity benchmark—Nifty— failed to stick with its two-day winning momentum and dropped over a percent on Friday as sentiments remained dismal ahead of inauguration speech of Donald Trump as US President. Investors turned jittery over the report that India's economy lost momentum in the final three months of 2016 after Prime Minister Narendra Modi's ban on high-value notes hurt consumption and businesses. Having posted growth of above 7% for six consecutive quarters, India's gross domestic product is expected to have expanded just 6.5% in the October-December quarter - the weakest in nearly three years.

Traders were seen offloading their positions in Metal, PSU and Realty stocks, while buying witnessed only in FMCG stock. The top gainers from the F&O segment were Havells India, Idea Cellular and JSW Energy. On the other hand, the top losers were Adani Power, Axis Bank and Sintex Industries. In the index option segment, maximum OI continues to be seen in the 8100-8700 calls and 7500-8400 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 5.12% and reached 15.79. The 50-share Nifty was down by 85.75 points or 1.02% to settle at 8,349.35.

Nifty January 2017 futures closed at 8362.65 on Friday at a premium of 13.30 points over spot closing of 8,349.35, while Nifty February 2017 futures ended at 8387.20 at a premium of 37.85 points over spot closing. Nifty January futures saw a contraction of 2.20 million (mn) units, taking the total outstanding open interest (OI) to 17.98 million (mn) units. The near month derivatives contract will expire on January 25, 2017.

From the most active contracts, Axis Bank January 2017 futures traded at a premium of 1.95 points at 450.65 compared with spot closing of 448.70. The numbers of contracts traded were 37,602.

Yes Bank January 2017 futures traded at a discount of 1.05 points at 1359.90 compared with spot closing 1,360.95. The numbers of contracts traded were 21,356.

State Bank of India January 2017 futures traded at a premium of 0.45 points at 251.65 compared with spot closing of 251.20. The numbers of contracts traded were 19,743.

HDFC Bank January 2017 futures traded at a premium of 3.25 points at 1239.25 compared with spot closing of 1,236.00. The numbers of contracts traded were 14,646.

Canara Bank January 2017 futures traded at a discount of 2.65 points at 269.95 compared with spot closing of 272.60. The numbers of contracts traded were 12,784.

Among Nifty calls, 8400 SP from the January month expiry was the most active call with an addition of 1.09 million open interests. Among Nifty puts, 8400 SP from the January month expiry was the most active put with a contraction of 1.13 million open interests. The maximum OI outstanding for Calls was at 8400 SP (5.48 mn) and that for Puts was at 8000 SP (6.89 mn). The respective Support and Resistance levels of Nifty are: Resistance 8401.68--- Pivot Point 8371.32--- Support --- 8318.98.

The Nifty Put Call Ratio (PCR) finally stood at 1.34 for January month contract. The top five scrips with highest PCR on OI were Pidilite Industries (2.49), Dabur India (2.28), Marico (1.65), Ajanta Pharma (1.58) and Maruti Suzuki India (1.57).

Among most active underlying, Yes Bank witnessed a contraction of 1.58 million units of Open Interest in the January month futures contract, followed by Axis Bank witnessing a contraction of 0.40 million units  of Open Interest in the January month contract, State Bank of India witnessed a contraction of 7.18 million units of Open Interest in the January month contract, Tata Steel witnessed a contraction of 2.10 million units of Open Interest in the January month future contract and Canara Bank witnessed an addition of 0.52 million units of Open Interest in the January month future contract.