Nifty ends lower for the second consecutive session

Nifty made a negative close on Tuesday for the second consecutive session with cut of over one third a percent. The broadly followed market Nifty started the trade on a positive note, as traders took some support with Industry chamber PHDCCI’s statement that the definition of micro, small and medium enterprises (MSMEs) on the basis of turnover will help in promoting the ease of doing business as the process of identification and dealings with such entities will become simpler and faster. But gains was short-lived and inroads into negative territory, as market participants failed to take any sense of relief with report that to protect consumers interest, the Reserve Bank of India (RBI) has said that on a peer-to-peer lending (P2P) platform the permissible exposure of a lender to all borrowers should not exceed Rs 50 lakh at any given point of time.

Local market continued its southward journey, as investors got wary with private report stating that the centre is staring at Rs 63,200-crore shortfall in goods and services tax (GST) compensation cess for FY20 as revenues slow down. Delay in release of compensation to states has already emerged as a bone of contention between Centre and states. Finally, Nifty ended the sluggish day of trade below 12250 level with International Monetary Fund’s report that India is now in the middle of a significant economic slowdown, urging the government to take immediate policy actions to tackle the current prolonged downturn.

Most of the the NSE sectoral indices ended in red, except Metal, Pharma and Realty. The top gainers from the F&O segment Indiabulls Housing Finance, United Breweries and National Aluminium Company. On the other hand, the top losers were Dish TV India, Bharat Forge and Bharat Petroleum Corporation. In the index option segment, maximum OI continues to be seen in the 12,100 - 12,500 calls and 11,900 -12,350 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short term expectation of volatility decreased by 2.78% and reached 11.62.The 50 share Nifty was down by 48.20 points or 0.39% to settle at 12,214.55.

Nifty December 2019 futures closed at 12236.50 (LTP) on Tuesday, at a premium of 21.95 points over spot closing of 12214.55, while Nifty January 2019 futures ended at 12291.60(LTP), at a premium of 77.05 points over spot closing. Nifty December futures saw an addition of 0.94 million (mn) units, taking the total outstanding open interest (OI) to 11.95 mn units. The near month derivatives contract will expire on December 26, 2019 (Provisional).

From the most active contracts, Yes Bank December 2019 futures traded at a premium of 0.30 points at 51.45 (LTP) compared with spot closing of 51.15. The numbers of contracts traded were 64,444 (Provisional).

Indiabulls Housing Finance December 2019 futures traded at a premium of 0.35 points at 308.95 (LTP) compared with spot closing of 308.60. The numbers of contracts traded were 43,576 (Provisional).

Housing Development Finance Corporation December 2019 futures traded at a premium of 4.40 points at 2417.40 (LTP) compared with spot closing of 2413.00. The numbers of contracts traded were 42,329 (Provisional).

Reliance Industries December 2019 futures traded at a premium of 3.50 points at 1548.00 (LTP) compared with spot closing of 1544.50. The numbers of contracts traded were 38,203 (Provisional).

Tata Consultancy Services December 2019 futures traded at a premium of 4.30 points at 2220.30 (LTP) compared with spot closing of 2216.00. The numbers of contracts traded were 26,711 (Provisional).

Among, Nifty calls, 12300 SP from the December month expiry was the most active call with an addition of 0.79 million open interests. Among Nifty puts, 12200 from the December month expiry was the most active put with a contraction of 0.48 units open interests. The maximum OI outstanding for Calls was at 12300 SP (3.68 mn) and that for Puts was at 12000 SP (3.12 mn). The respective Support and Resistance levels of Nifty are: Resistance 12,264.80 -- Pivot Point 12,233.45 -- Support --12,183.20.

The Nifty Put Call Ratio (PCR) finally stood at 1.35 for December month contract. The top five scrips with highest PCR on Shriram Transport Finance Company (1.37), Indraprastha Gas (1.32), Tata Motors DVR (1.29),Just Dial (1.27) and Tata Consultancy Services (1.21).

Among most active underlying, Reliance Industries witnessed an addition of 2.69 million units of Open Interest in the December month futures contract, followed by State Bank of India witnessing a contraction of 2.01 million units of Open Interest in the December month contract, Housing Development Finance Corporation witnessed an addition of 2.70 million units of Open Interest in the December month contract, Maruti Suzuki India witnessed an addition of 0.54 million units of Open Interest in the December month contract and ICICI Bank witnessed an addition of 11.74 million units of Open Interest in the December month future contract (Provisional).