MUMBAI: Tracking mixed global cues, Indian stocks ended marginally lower ending the three day winning streak Thursday. National Stock Exchange’s 50-share Nifty ended 0.28 per cent lower at 2920 while, Nifty December futures provisionally settled at a 5 points premium. The premium narrowed from 9 points on Wednesday. The contract price fell 0.40 per cent while open interest added 21.93 lakh shares with negative cost of carry suggests build up of short positions in the contract at higher levels.

In extremely volatile trade, Indian markets recovered early losses on better than expected inflation data but fell on weak European markets and again recovered from day’s low as players covered some short positions in late trade. Intraday, Nifty touched a high of 2945 and low of 2861, a band of 84 points.

Earlier in the day, India’s annual rate of inflation dropped further to 8 percent for the week ended Nov 29 from 8.4 percent the week before, government data showed. The inflation rate was 3.89 percent during the corresponding week last year.

Call writing was observed at 2900 levels while call buying was seen at 3000 and 3100 strikes. Unwinding of long calls witnessed at 3200 levels. On the other hand, bears unwound long puts at strikes 2900, 2700, 2600 and 2500 strikes while put buying was seen at strike 2800.

The unclear build up in the options segment indicates markets players expects Nifty to remain range bound in 2700-3000 levels for near term. Bulls are expecting Nifty to face resistance at 3000-3050 level as they unwound 3200 long calls while bears unwound long puts betting Nifty may not drift below 2700 level in near term.

“After rallying for past few sessions on the back of buoyant global cues, market players expect some sideways movements for Nifty with slight negative bias in coming sessions. The decline in the options premium indicates markets are likely to see some dull trading from the players in near term. The industrial production data is important which may guide investors further. At current levels I will advise players to remain light in the markets,” said Abhishek Vaidya, analyst at Spectrum Advisory.

In stocks, Reliance Industries December rose 3.06 per cent and open interest added 5.45 lakh shares. State Bank of India gained 0.52 per cent while, DLF slipped 2.16 per cent. Reliance Capital advanced 5.17 per cent on short covering.

NTPC skid 1.03 per cent and open interest shed 9 lakh shares. Bharati Airtel gained 0.7 per cent and Reliance Petroleum surged 9.21 per cent. Reliance Communications rose 4.88 per cent and added 5.54 lakh shares in open interest. Reliance Natural Resources soared 28 per cent and open interest added 64.33 lakh shares in open interest.

Meanwhile, stocks fell in European as concern that the global slowdown is deepening weighed on mining and consumer companies, overshadowing a rally in oil producers. However, US index futures and Asian shares advanced.

source: Economictimes

Tags: calls, daytrading, free calls, intraday, tips

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