Nifty snaps 7-day rally; end below 10,960 mark

Halting 7-day long winning streak, key equity benchmark -- finished Thursday’s trading session on a lower note, amid weak global cues after the US Federal Reserve raised its key interest rate for the fourth time this year. Barometer made a gap-down start as traders remained on the sidelines with the US think-tank National Bureau of Economic Research’s (NBER) report that the November 2016 demonetisation impacted economic activity in the country in the immediate aftermath, affecting the Gross Domestic Product (GDP) numbers for that fiscal, while the measure's impact had dissipated by the summer of the following year. Traders also remained concerned with the World Bank’s latest report stating that India lost a staggering $86.1 billion, equivalent to over 4% of its GDP, owing to distortions in the power sector in 2016. It added that although India has achieved 100 per cent village electrification earlier this year, 178 million Indians still remain unconnected to the grid as per figures for 2017.

However, market started paring most of the losses in the afternoon deals, as traders took some support with the Lok Sabha passing the Consumer Protection Bill, 2018. The bill calls for strict punishment, including jail terms and hefty fines for misleading advertisements and food adulteration. Meanwhile, traders took a note of the government sought Parliament's approval for additional gross expenditure of Rs 85,948.86 crore, about half of which is for capital infusion in public sector banks through recapitalisation bonds, during the current fiscal ending March 2019.

All the sectoral indices ended in red on the NSE except Auto, Pharma and Pvt Banks stocks. The top gainers from the F&O segment were Ujjivan Financial Services, BEML and IDFC. On the other hand, the top losers were National Aluminium Company, Marico and Allahabad Bank. In the index option segment, maximum OI continues to be seen in the 10,800-11,200 calls and 10,400 -10,800 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 2.23% and reached 14.33. The 50-share Nifty was down by 15.60 points 0.14% to settle at 10,951.70.

Nifty December 2018 futures closed at 10978.20 on Thursday, at a premium of 26.50 points over spot closing of 10951.70, while Nifty January 2019 futures ended at 11018.00, at a premium of 66.30 points over spot closing. Nifty December futures saw a contraction of 0.22 million (mn) units, taking the total outstanding open interest (OI) to 21.03 mn units. The near month derivatives contract will expire on December 27, 2018.

From the most active contracts, Yes Bank December 2018 futures traded at a premium of 0.65 points at 187.45 compared with spot closing of 186.80. The numbers of contracts traded were 44,362.

Reliance Industries December 2018 futures traded at a premium of 1.00 points at 1130.90 compared with spot closing of 1129.90. The numbers of contracts traded were 37,328.

Indiabulls Housing Finance December 2018 futures traded at a premium of 0.65 points at 848.80 compared with spot closing of 848.15. The numbers of contracts traded were 32,386.

State Bank of India December 2018 futures traded at a premium of 0.90 points at 294.90 compared with spot closing of 294.00. The numbers of contracts traded were 24,279.

Dewan Housing Finance Corporation December 2018 futures traded at a premium of 0.70 points at 239.20 compared with spot closing of 238.50. The numbers of contracts traded were 20,687.

Among Nifty calls, 11000 SP from the December month expiry was the most active call with an addition of 0.32 million open interests. Among Nifty puts, 10,900 SP from the December month expiry was the most active put with an addition of 0.31 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (4.14mn) and that for Puts was at 10,500 SP (4.05mn). The respective Support and Resistance levels of Nifty are: Resistance 10,982.82 ---- Pivot Point 10,931.43 --- Support --- 10,900.32.

The Nifty Put Call Ratio (PCR) finally stood at 1.47 for December month contract. The top five scrips with highest PCR on OI were Power Grid Corporation of India (1.76), Adani Power (1.50), Godrej Consumer Products (1.47), Hero Motocorp (1.39) and Castrol India (1.39).

Among most active underlying, Reliance Industries witnessed a contraction of 7.14 million units of Open Interest in the December month futures contract, followed by State Bank of India witnessing a contraction of 11.29 million units of Open Interest in the December month contract, Maruti Suzuki India witnessed an addition of 0.02 million units of Open Interest in the December month contract, Housing Development Finance Corporation witnessed a contraction of 2.82 million units of Open Interest in the December month contract and Infosys witnessed a contraction of 1.92 million units of Open Interest in the December month future contract.