Nifty witnesses massacre; plunges over 1.5%

Key equity benchmark -- Nifty -- faced steep decline for the third straight day amid negative global cues, weak rupee and sustained selling by foreign as well as domestic institutional investors. Barometer made a negative start with Fitch Ratings revising downwards India’s GDP growth forecast to 7.2% for current fiscal citing higher financing cost and reduced credit availability. In its Global Economic Outlook, Fitch also projected that for 2019-20 and 2020-21 financial years, India’s GDP growth will be 7% and 7.1% respectively. The rating agency has also forecasted Indian rupee to weaken to 75 to a dollar by end of 2019. Adding to pessimism Fitch Solutions said that the slow pace of land reforms will continue to result in project delays and rising costs, posing a downside risk for the road and rail sectors. Some concerns also came with a private report stating that officers of the indirect tax department have started issuing preliminary notices to captive units of multinationals and Indian companies exporting offshore support services.

Market continued northward journey in the second half of the session as investors continued selling riskier assets. However, traders paid no heed to Finance Minister Arun Jaitley’s statement that India, among the world's fastest growing emerging economies, is likely to maintain the ‘high growth rate’ of 7-8 per cent over the next decade. He emphasized that landmark reforms such as the Insolvency and Bankruptcy Code offer an attractive and conducive environment to foreign investors to the country. Meanwhile, Union Cabinet is expected to approve a policy to boost exports of agriculture commodities such as tea, coffee and rice and increase the country’s share in global agri trade.

All the sectoral indices ended in red on the NSE. The top gainers from the F&O segment were Sun TV Network, PTC India and United Breweries. On the other hand, the top losers were NCC, The South Indian Bank and Century Textiles & Industries. In the index option segment, maximum OI continues to be seen in the 10,900-11,200 calls and 9,900 -10,200 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 4.98% and reached 19.30. The 50-share Nifty was down by 181.75 points 1.69% to settle at 10,601.15.

Nifty December 2018 futures closed at 10626.30 on Thursday, at a premium of 25.15 points over spot closing of 10601.15, while Nifty January 2019 futures ended at 10672.15, at a premium of 71.00 points over spot closing. Nifty December futures saw an addition of 1.07 million (mn) units, taking the total outstanding open interest (OI) to 21.40 mn units. The near month derivatives contract will expire on December 27, 2018.

From the most active contracts, Sun Pharma December 2018 futures traded at a premium of 4.30 points at 421.85 compared with spot closing of 417.55. The numbers of contracts traded were 56,385.

Tata Steel December 2018 futures traded at a premium of 1.95 points at 512.65 compared with spot closing of 510.70. The numbers of contracts traded were 23,343.

Reliance Industries December 2018 futures traded at a premium of 9.00 points at 1128.05 compared with spot closing of 1119.05. The numbers of contracts traded were 23,008.

Yes Bank December 2018 futures traded at a premium of 0.65 points at 169.00 compared with spot closing of 168.35. The numbers of contracts traded were 21,599.

Maruti Suzuki India December 2018 futures traded at a premium of 36.75 points at 7237.75 compared with spot closing of 7201.00. The numbers of contracts traded were 20,292.

Among Nifty calls, 11000 SP from the December month expiry was the most active call with an addition of 1.32 million open interests. Among Nifty puts, 10,500 SP from the December month expiry was the most active put with a contraction of 0.50 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.10mn) and that for Puts was at 10,000 SP (3.79mn). The respective Support and Resistance levels of Nifty are: Resistance 10,686.45 ---- Pivot Point 10,637.35 --- Support --- 10,552.05.

The Nifty Put Call Ratio (PCR) finally stood at 1.07 for December month contract. The top five scrips with highest PCR on OI were V-Guard Industries (3.30), Mangalore Refinery & Petrochemicals (1.59), Manappuram Finance (1.48), Oriental Bank of Commerce (1.20) and Torrent Power (1.19).

Among most active underlying, Sun Pharmaceutical Industries witnessed an addition of 1.68 million units of Open Interest in the December month futures contract, followed by Reliance Industries witnessing a contraction of 0.12 million units of Open Interest in the December month contract, Maruti Suzuki India witnessed an addition of 0.08 million units of Open Interest in the December month contract, ICICI Bank witnessed a contraction of 1.37 million units of Open Interest in the December month contract and Tata Steel witnessed a contraction of 0.10 million units of Open Interest in the December month future contract.