Nifty tumbles on weak global clues; plunges 1.81%

Key equity benchmark -- Nifty -- witnessed a sharp sell-off on the last day of the trading week, with Nifty dropping 1.81%, as traders booked profits in Realty, FMCG, IT and Auto stocks amid weak signals from global markets. Barometer made a negative start, as traders remained cautious with the central bank’s statement that the total external commercial borrowings (ECB) will now be rule-based and will be capped at 6.5% of the gross domestic product. The limit now works out to be about $160 billion for the current fiscal year, against the actual outstanding of $126.29 billion as on September 30. The central bank already has a rule-based exposure for foreign investors’ exposure in bonds. Besides, International Institute of Sustainable Development (IISD) stated that India's total energy subsidies amounted to Rs 1,51,480 crore in financial year 2017, a 36 per cent decrease since FY14. India's fossil-fuel subsidies fell sharply by nearly 70 per cent, from Rs 1,73,330 crore in FY14 to Rs 52,980 crore in FY17.

Market continued southward journey in the last leg of the trading session to end near intraday low, as traders sentiments remained dampened with Parliamentary Committee expressing concern over the huge losses suffered by some Central Public Sector Undertakings (CPSUs) and the low rate of return on assets and pressed the urgent need for optimum utilisation of their assets to generate better earnings. Market participants ignored report stating that after pipping France this year, India is all set to overtake the United Kingdom in 2019 to emerge as the world’s fifth largest economy.

All the sectoral indices ended in red on the NSE. The top gainers from the F&O segment were CG Power and Industrial Solutions, Jai prakash Associates and Hindustan Petroleum Corporation. On the other hand, the top losers were Godfrey Phillips India, Indian Oil Corporation and Shriram Transport Finance Company. In the index option segment, maximum OI continues to be seen in the 10,800-11,200 calls and 9,800 -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 11.58% and reached 15.99. The 50-share Nifty was down by 197.70 points 1.81% to settle at 10,754.00.

Nifty December 2018 futures closed at 10767.50 on Friday, at a premium of 13.50 points over spot closing of 10754.00, while Nifty January 2019 futures ended at 10811.95, at a premium of 57.95 points over spot closing. Nifty December futures saw a contraction of 0.70 million (mn) units, taking the total outstanding open interest (OI) to 20.32 mn units. The near month derivatives contract will expire on December 27, 2018.

From the most active contracts, Reliance Industries December 2018 futures traded at a premium of 2.45 points at 1100.45 compared with spot closing of 1098.00. The numbers of contracts traded were 45,096.

Yes Bank December 2018 futures traded at a premium of 0.15 points at 183.30 compared with spot closing of 183.15. The numbers of contracts traded were 38,824.

Indiabulls Housing Finance December 2018 futures traded flat at 818.15 with spot closing of 818.15. The numbers of contracts traded were 31,742.

Tata Motors December 2018 futures traded at a premium of 0.65 points at 176.15 compared with spot closing of 175.50. The numbers of contracts traded were 25,983.

HDFC Bank December 2018 futures traded at a premium of 7.10 points at 2118.25 compared with spot closing of 2111.15. The numbers of contracts traded were 25,552.

Among Nifty calls, 11,000 SP from the December month expiry was the most active call with an addition of 1.73 million open interests. Among Nifty puts, 10,800 SP from the December month expiry was the most active put with a contraction of 1.36 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (5.88mn) and that for Puts was at 10,000 SP (4.85mn). The respective Support and Resistance levels of Nifty are: Resistance 10,898.88 -- Pivot Point 10,818.77 -- Support -- 10,673.88.

The Nifty Put Call Ratio (PCR) finally stood at 1.03 for December month contract. The top five scrips with highest PCR on OI were Castrol India (1.85), Power Grid Corporation of India (1.66), Berger Paint (1.61), Adani Power (1.51) and Hero Motocorp (1.32).

Among most active underlying, Reliance Industries witnessed a contraction of 8.19 million units of Open Interest in the December month futures contract, followed by Maruti Suzuki India witnessing a contraction of 0.16 million units of Open Interest in the December month contract, Infosys witnessed a contraction of 4.71 million units of Open Interest in the December month contract, HDFC witnessed a contraction of 3.86 million units of Open Interest in the December month contract and ICICI Bank witnessed a contraction of 6.21 million units of Open Interest in the December month future contract.