Indian equity benchmarks snapped a two-day winning streak on Wednesday, after the Reserve Bank of India's surprising decision to keep interest rates unchanged. Most economists had predicted an interest rate cut of at least 25 basis points.
After the initial knee-jerk reaction, the movement on the indices soon stabilised with the Nifty 50 index retreating by only 0.5 percent. Its December futures added 2 percent in open interest showing fresh selling.
The Nifty Bank Index, which declined by 1 percent, saw a large increase of over 10 percent in its December futures, indicating fresh short positions. Foreign institutional investors bought index futures worth Rs 212 crore.
The India Volatility Index (VIX) declined 1.5 percent to close at 16.84 reflecting contraction in option premiums despite retreating major indices.
Maximum open interest remained with 8,300 call and the 8,000 put showing near-term range for the Nifty. FIIs bought 11,460 index puts against 2,675 index calls on net basis showing near-term bearishness.
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