Nifty witnesses bloodbath after Fed rate hike

Indian equity benchmark -- Nifty -- witnessed massacre on Thursday after Fed hikes interest rate by 50 bps. Market made negative start and witnessed selling throughout the day as sentiments remained dampened with former governor of the Reserve Bank of India Raghuram Rajan’s statement that the next year will be difficult for the Indian economy as also for the rest of the world and the country failed to generate reforms needed for growth. He said policies should be formulated keeping in mind the lower middle class which suffered the most due to the coronavirus pandemic. Traders shrugged off private report where India has been upgraded from ‘Underweight’ to ‘Benchmark’ for 2023, on the back of the country’s underlying economic strength. The foreign brokerage held back from upgrading India to 'Overweight' because of high-valuation premium and the weakening balance of payments (BoP).

Market extended its losses as traders paid no heed towards with Finance Minister Nirmala Sitharaman’s statement that the government is on track to meet its budgetary target for deficit and added that there is no fear of stagflation in India. She further said that inflation has come down and it is now in the tolerable band of the RBI. She highlighted that inflation has been declining since April 2022 and it is declining further. Selling got brutal in the second half of the trading session which pull Nifty near 18,400 mark, as sentiments remained downbeat with private report stating that India's current account deficit likely rose to its highest in nearly a decade in the July-September quarter as elevated commodity prices and a weak rupee stretched the trade gap even further.

Most of the sectorial indices ended in red. The top gainers from the F&O segment were Piramal Enterprises, Indiabulls Housing Finance and Godrej Consumer Products. On the other hand, the top losers were Metropolis Healthcare, Ambuja Cements and Indian Railway Catering and Tourism Corporation. In the index option segment, maximum OI continues to be seen in the 18900 -19100 calls and 17900 -18100 puts indicating this is the trading range expectation.

India Volatility Index (VIX), a gauge for market’s short-term expectation of volatility increased by 6.57% and reached 13.73. The 50 share Nifty down by 245.40 points or 1.32% to settle at 18,414.90.

Nifty December 2022 futures closed at 18445.50 (LTP) on Thursday, at a premium of 30.60 points over spot closing of 18414.90, while Nifty January 2023 futures ended at 18563.40 (LTP), at a premium of 148.50 points over spot closing. Nifty December futures saw an addition of 19,600 units, taking the total open interest (Contracts) to 2,29,763 units. The near month derivatives contract will expire on December 29, 2022. (Provisional)
 
From the most active contracts, Reliance Industries December 2022 futures traded at a premium of 6.05 points at 2586.05 (LTP) compared with spot closing of 2580.00. The numbers of contracts traded were 24,198. (Provisional)

Indian Railway Catering and Tourism Corporation December 2022 futures traded at a premium of 1.70 points at 688.85 (LTP) compared with spot closing of 687.15. The numbers of contracts traded were 23,421. (Provisional)

HDFC Bank December 2022 futures traded at a premium of 6.05 points at 1636.05 (LTP) compared with spot closing of 1630.00. The numbers of contracts traded were 20,137. (Provisional)

Infosys December 2022 futures traded at a premium of 2.05 points at 1542.00 (LTP) compared with spot closing of 1539.95. The numbers of contracts traded were 19,107. (Provisional)

State Bank of India December 2022 futures traded at a discount of 0.70 points at 614.00 (LTP) compared with spot closing of 614.70. The numbers of contracts traded were 17,679. (Provisional)

Among, Nifty calls, 18600 SP from the December month expiry was the most active call with an addition of 18,358 units open interests. Among Nifty puts, 18400 SP from the December month expiry was the most active put with a contraction of 6,398 units open interests. The maximum OI outstanding for Calls was at 19000 SP (80,752 units) and that for Puts was at 18000 SP (76,542 units). The respective Support and Resistance levels of Nifty are: Resistance 18582.63 -- Pivot Point 18485.16 -- Support -- 18317.43.

The Nifty Put Call Ratio (PCR) finally stood at (1.13) for December month contract. The top five scrips with highest PCR on RBL Bank (1.03), Power Finance Corporation (1.00), Aditya Birla Capital (0.98), and AXIS Bank (0.92).

Among most active underlying, HDFC Bank witnessed an addition of 293 units of Open Interest in the December month futures, State Bank of India witnessed a contraction of 548 units of Open Interest in the December month futures, ICICI Bank witnessed an addition of 1,046 units of Open Interest in the December month futures, Reliance Industries witnessed an addition of 1,951 units of Open Interest in the December month futures, and Punjab National Bank witnessed an addition of 459 units of Open Interest in the December month futures. (Provisional)