Nifty slumps on global sell-off; drops below 10,680-mark

Indian equity benchmark -- Nifty -- extends losses for second straight session on Monday, following the partial shutdown of the US government and concerns over the slowing global growth. Index started trading slightly in green in the early deals, soon entered into negative trajectory as traders remained cautions with a report that Finance Commission Chairman N.K. Singh has sounded a note of caution against fiscal slippage, saying it would adversely impact the country’s macroeconomic stability as well as investment climate. He expressed apprehension that some states are not according priority to fiscal discipline, which was not the case earlier. Adding to some more pessimism Reserve Bank of India’s (RBI) data showed the country’s foreign exchange reserves declined by $613.9 million to $393.12 billion in the week to December 14, due to fall in foreign currency assets. In the reporting week, foreign currency assets, a major component of the overall reserves, dropped by $631.6 million to $367.86 billion.

Market extended southern journey in the last hours of the trade, as anxiety remained among the traders with the Directorate General of GST Intelligence (DGGI) has busted a racket of fraudulent companies engaged in raising fake tax invoices worth Rs 220 crore to avail input-tax credit. Sentiments also remained dampened with SEBI Chairman Ajay Tyagi’s statement that the capital markets, globally, have been quite volatile during the current year and are likely to remain so in coming times on account of various factors such as US Fed rate hikes, volatile oil prices, intensifying trade conflicts and sanctions.

All the sectoral indices ended in red on the NSE except PSU Bank and IT. The top gainers from the F&O segment were REC, V-Guard Industries and Bank of India. On the other hand, the top losers were SRF, Jubilant Foodworks and Jaiprakash Associates. 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 decreased by 1.52% and reached 15.75. The 50-share Nifty was down by 90.50 points 0.84% to settle at 10,663.50.

Nifty December 2018 futures closed at 10681.90 on Monday, at a premium of 18.40 points over spot closing of 10663.50, while Nifty January 2019 futures ended at 10726.50, at a premium of 63.00 points over spot closing. Nifty December futures saw a contraction of 5.31 million (mn) units, taking the total outstanding open interest (OI) to 15.01 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 1.25 points at 1090.55 compared with spot closing of 1089.30. The numbers of contracts traded were 38,437.

Yes Bank December 2018 futures traded at a premium of 0.40 points at 182.75 compared with spot closing of 182.35. The numbers of contracts traded were 37,293.

HDFC Bank December 2018 futures traded at a premium of 4.45 points at 2087.45 compared with spot closing of 2083.00. The numbers of contracts traded were 26,414.

Sun Pharma December 2018 futures traded at a premium of 0.85 points at 424.35 compared with spot closing of 423.50. The numbers of contracts traded were 24,594.

Maruti Suzuki India December 2018 futures traded at a premium of 9.10 points at 7538.25 compared with spot closing of 7529.15. The numbers of contracts traded were 21,957.

Among Nifty calls, 10,800 SP from the December month expiry was the most active call with an addition of 0.40 million open interests. Among Nifty puts, 10,700 SP from the December month expiry was the most active put with an addition of 0.10 million open interests. The maximum OI outstanding for Calls was at 11,000 SP (5.80mn) and that for Puts was at 10,000 SP (5.58mn). The respective Support and Resistance levels of Nifty are: Resistance 10,747.45 ---- Pivot Point 10,698.35 --- Support --- 10,614.40.

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 Mangalore Refinery & Petrochemicals (1.84), Adani Power (1.67), Power Grid Corporation of India (1.39), Berger Paint (1.37) and Castrol India (1.25).

Among most active underlying, Reliance Industries witnessed a contraction of 10.38 million units of Open Interest in the December month futures contract, followed by Housing Development Finance Corporation witnessing a contraction of 7.13 million units of Open Interest in the December month contract, Maruti Suzuki India witnessed a contraction of 0.71 million units of Open Interest in the December month contract, State Bank of India witnessed a contraction of 17.48 million units of Open Interest in the December month contract and Infosys witnessed a contraction of 9.11 million units of Open Interest in the December month future contract.