Nifty witnesses massacre; ends below 10,500 mark

The local Indian equity benchmark Nifty ended Monday’s session near intraday low point, with losses of more than 200 points, amid tensions between the US and China may derail the prospects of a trade deal. Markets started the session with a huge gap on downside and never looked in recovery mood to end near intraday low levels. Sentiments remained downbeat since beginning with the Reserve Bank of India’s (RBI) data showing that India’s current account deficit (CAD) widened to 2.9% of the Gross Domestic Product (GDP) in the second quarter of the fiscal compared to 1.1% in the year-ago period, mainly due to a large trade deficit. Traders also remained cautious ahead of the election results outcome of the five major states - Chhattisgarh, Madhya Pradesh, Mizoram, Telangana and Rajasthan - on December 11. The exit polls for five states showed that Prime Minister Narendra Modi’s popularity is in doubt going into 2019 election. Market extended losses in last leg of trade to end near intraday low level after former chief economic advisor Arvind Subramanian said that the new gross domestic product back-series data, released late last month by the Central Statistics Office and NITI Aayog, raised a lot of questions and hurt the credibility of official data.

Selling remained a persistent activity across all sectors as former chief economic advisor Arvind Subramanian said that the new gross domestic product back-series data, released late last month by the Central Statistics Office and NITI Aayog, raised a lot of questions and hurt the credibility of official data. However, traders paid no attention to RBI’s weekly statistical supplement showing that India’s foreign exchange (forex) reserves rose by $932.8 million during the week ended November 30.

All the sectoral indices ended in red on the NSE. The top gainers from the F&O segment were Kaveri Seed Company, Indian Oil Corporation and Allahabad Bank. On the other hand, the top losers were Infibeam Avenues, Reliance Communications and Jet Airways (India). In the index option segment, maximum OI continues to be seen in the 10,900-11,200 calls and 9900 -10,100 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility increased by 9.94% and reached 20.43. The 50-share Nifty was down by 205.25 points 1.92% to settle at 10,488.45.

Nifty December 2018 futures closed at 10514.70 on Monday, at a premium of 26.25 points over spot closing of 10488.45, while Nifty January 2019 futures ended at 10560.65, at a premium of 72.20 points over spot closing. Nifty December futures saw a contraction of 0.35 million (mn) units, taking the total outstanding open interest (OI) to 21.69 mn units. The near month derivatives contract will expire on December 27, 2018.

From the most active contracts, Kotak Mahindra Bank December 2018 futures traded at a premium of 2.30 points at 1203.80 compared with spot closing of 1201.50. The numbers of contracts traded were
49,505.

Yes Bank December 2018 futures traded at a premium of 0.95 points at 165.90 compared with spot closing of 164.95. The numbers of contracts traded were 27,256.

Reliance Industries December 2018 futures traded at a premium of 7.05 points at 1092.05 compared with spot closing of 1085.00. The numbers of contracts traded were 26,969.

Sun Pharmaceutical Industries December 2018 futures traded at a premium of 1.45 points at 400.45 compared with spot closing of 399.00. The numbers of contracts traded were 21,244.

HDFC Bank December 2018 futures traded at a premium of 14.05 points at 2098.55 compared with spot closing of 2084.50. The numbers of contracts traded were 19,580.

Among Nifty calls, 10700 SP from the December month expiry was the most active call with an addition of 1.18 million open interests. Among Nifty puts, 10,500 SP from the December month expiry was the most active put with a addition of 0.11 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.77mn) and that for Puts was at 10,000 SP (4.54mn). The respective Support and Resistance levels of Nifty are: Resistance 10,539.88 ---- Pivot Point 10,507.42 --- Support --- 10,455.98.

The Nifty Put Call Ratio (PCR) finally stood at 0.99for December month contract. The top five scrips with highest PCR on OI were V-Guard Industries (2.65), Mangalore Refinery & Petrochemicals (1.75), Adani Power (1.53), Manappuram Finance (1.31) and Just Dail(1.21).

Among most active underlying, Kotak Mahindra Bank witnessed an addition of 0.44 million units of Open Interest in the December month futures contract, followed by Reliance Industries witnessing an addition of 0.77 million units of Open Interest in the December month contract, Maruti Suzuki India witnessed a contraction of 0.05 million units of Open Interest in the December month contract, ICICI Bank witnessed a contraction of 2.55 million units of Open Interest in the December month contract and Sun Pharmaceutical Industries witnessed an addition of 0.30 million units of Open Interest in the December month future contract.