Nifty declines for fourth consecutive session; closes below 6700

The fifty stock index -- Nifty -- extended its downfall for fourth consecutive session and finished the volatile day of trade with a cut of over eighteen points. Though, the market traded in the positive terrain during first half but, slipped in red in the second half on the back of selling witnessed in Realty, Capital Goods and Power sector stocks. The Indian equity market made a decent up move in early trade but pared some of its initial gains as investors remained cautious ahead of the outcome of the Fed meeting as well as key US jobs data scheduled on Friday, and against a backdrop of continuing tensions in Ukraine. Amidst the broad-based selling pressure, stocks from Auto and Fast Moving Consumer Goods counters were the one to depict resilience. However, massive drubbing was witnessed in stocks from Realty, Power and Capital Goods counters. The metal pack witnessed profit-booking on reports the Chinese Academy of Social Sciences (CASS), one of Beijing's top government think tanks, has revised its 2014 GDP growth forecast down to 7.4%, below the official 7.5% target, and said that growth could slow to as low as 7%.

In the index option segment, maximum OI continues to be seen in the 7000-6900 calls and 6500-6400 puts indicating this is the trading range expectation. In today's session, the 6800, 6900 and 7000 Call strikes saw addition of 3.02, 2.41 and 3.84 lakh shares, respectively. On the other hand, 6800, 6600 and 6500 Put strikes saw addition of 3.33, 4.91 and 6.06 lakh shares, respectively. Meanwhile, many traders exited from 6700 puts on the back of profit booking. Moreover, India VIX - the gauge of underlying volatility in the market – has declined for second consecutive day as traders turned cautious ahead of the outcome of the Fed meeting. Declining India VIX indicates that traders have slowed lower buying in options contracts. The top gainers from the F&O Securities were Indian Overseas Bank, Glenmark Pharmaceuticals and Hero MotoCorp. The top losers were DLF, Unitech and HDIL.

Most of the sectoral indices on the NSE were settled in the red, CNX Realty declined by 5.46%, CNX Metal down by 1.14%, CNX Media down by 0.71%, Bank Nifty down by 0.42%, CNX Energy down by 0.29%, CNX IT down by 0.26%, CNX Finance down by 0.09% and CNX Pharma down by 0.08% remained the losers in the trade, while CNX Auto up by 0.38% followed by CNX PSU Bank up 0.35% and  CNX FMCG up by 0.09% remained the only gainers in the trade.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.47% and reached 30.5925. The 50-share CNX Nifty plunged by 18.85 points or 0.28% to settle at 6,696.40. Nifty May 2014 futures closed at 6,726.45 on Wednesday at a premium of 30.05 points over spot closing of 6,696.40, while Nifty June 2014 futures ended at 6,745.80 at a premium of 49.40 points over spot closing. Nifty May futures saw an addition of 0.05 million (mn) units, taking the total outstanding open interest (OI) to 12.96 mn units. The near month May 2014 derivatives contract will expire on May 29, 2014.

From the most active contracts, DLF May 2014 futures traded at a premium of 1.90 points at 141.35 compared with spot closing of 139.45. The number of contracts traded was 25,840.

Reliance Capital May 2014 futures traded at a premium of 2.20 points at 357.60 compared with spot closing of 355.40. The number of contracts traded was 20,796.

Reliance Industries May 2014 futures were at a premium of 0.70 points at 936.80 compared with spot closing of 936.10. The number of contracts traded was 25,862.

Tata Steel May 2014 futures traded at a premium of 2.35 points at 403.65 compared with spot closing of 401.30. The number of contracts traded was 19,690.

Adani Enterprises May 2014 futures were at a premium of 0.25 points at 421.45 compared with spot closing of 421.20. The number of contracts traded was 18,410.Among Nifty calls, 6,800 SP from the May month expiry was the most active call with addition of 0.21 million open interest.

Among Nifty puts, 6500 SP from the May month expiry was the most active put with addition of 0.59 million open interest.

The maximum OI outstanding for Calls was at 6,800 SP (2.98 mn) and that for Puts was at 6,500 SP (3.70 mn).

The respective Support and Resistance levels of Nifty are: Resistance 6765.43 --- Pivot Point 6711.12 --- Support --- 6642.08.

The Nifty Put Call Ratio (PCR) finally stood at 1.06 for May month contract. The top five scrips with highest PCR on OI were Ultra Cement 1.28, UPL 1.26, REC 1.24, Hero Moto 0.90, and Tech Mahindra 0.89.

Among most active underlying, United Spirits witnessed  marginal an addition of Open Interest in the May month futures contract, followed by Reliance Industries witnessing addition of 0.25 million of Open Interest in the May  month contract; HDFC Bank witnessed an addition of 0.17 million of Open Interest in the May month futures contract. SBI witnessed marginal contraction of Open Interest in the May month contract and Auro Pharma witnessed contraction of 0.52 million of Open Interest in the May month's future contract.