Nifty snaps two-day gains amid weak global cues

Indian equity benchmark, Nifty snapped the two-day winning streak and closed down by around one percent on Wednesday on account of profit booking by fund and retail investors amid weak global cues. Sentiments remained on pessimistic mood amid rising tensions over Ukraine and concern that stronger US growth will lead to interest rates going up earlier-than-expected. Further the depreciation in rupee value to four-and-half month low level against the dollar also dampened the sentiments and almost all sectoral indices on Nifty ended trade in negative territory. On global front, Asian markets and European shares also moved lower due to sluggish global cues.

Back home, the key domestic benchmark made weak opening, tracking weak cues in US markets which ended lower overnight on worries about the outlook for monetary policy. Market continued its weak trade during the afternoon session. The falling trend was cushioned to some extent as IT index surged as a weaker rupee improved their earnings outlook. PSU Bank was the top losing index on profit-booking at prevailing levels and worries that a sell-off in government bonds would hit portfolio value of their debt holdings. In the last leg of trade, rate sensitive stocks such as banking, metal and finance stocks witnessed sharp selling forcing Nifty to end the trade with a loss of 75 points.

Meanwhile, sectoral indices on the NSE made negative closing. CNX PSU Bank down by 2.20%, CNX Metal down by 1.97%, CNX Finance down by 1.61%, CNX FMCG down by 1.49%  and CNX Realty down by 1.13% were remained the top loser in the trade. On the flip side, CNX IT up by 0.59% was the only gaining index on NSE. The India Volatility Index (VIX), a gauge for market's short term expectation of volatility increased by 2.50% and reached 14.29. The 50-share CNX Nifty slumped by 74.50 points or 0.96% to settle at 7,672.05.

Among Nifty calls, 8000 SP from the August month expiry was the most active call with an addition of 0.81 million open interests. Among Nifty puts, 7,200 SP from the August month expiry was the most active put with an addition of 0.43 million open interests. The maximum OI outstanding for Calls was at 8000 SP (6.14 mn) and that for Puts was at 7,500 SP (5.97 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7722.35 --- Pivot Point 7690.65 --- Support --- 7640.35.

The Nifty Put Call Ratio (PCR) finally stood at 1.07 for August month contract. The top five scrips with highest PCR on OI were Bata India (1.81), Maruti Suzuki (1.47), IndusInd Bank (1.20), Coal India (1.15) and Jubilant Food (1.08). Nifty August 2014 futures closed at 7,691.45 on Wednesday at a premium of 19.40 points over spot closing of 7,672.05, while Nifty September 2014 futures ended at 7,725.80 at a premium of 53.75 points over spot closing. Nifty August futures saw an addition of 0.60 million (mn) units, taking the total outstanding open interest (OI) to 13.73 mn units. The near month derivatives contract will expire on August 28, 2014.

From the most active contracts, DLF August 2014 futures traded at a discount of 0.80 points at 201.25 compared with spot closing of 202.05. The number of contracts traded were 13,803.

Reliance Industries August 2014 futures traded at a premium of 2.15 points at 992.20 compared with spot closing of 990.05. The number of contracts traded were 30,613.

Tata Steel August 2014 futures traded at a premium of 2.15 points at 552.75 compared with spot closing of 550.60. The number of contracts traded were 15,842.

Apollo Tyre August 2014 futures traded at a premium of 1.50 points at 172.65 compared with spot closing of 171.15. The number of contracts traded were 18,879.

L&T August 2014 futures traded at a discount of 3.90 points at 1477.20 compared with spot closing of 1481.10. The number of contracts traded were 20,921.

Among most active underlying, Infosys witnessed an addition of 0.19 million of Open Interest in the August month futures contract, followed by Reliance Industries witnessing a contraction of 0.11 million of Open Interest in the August month contract; while Tata Steel witnessed a contraction of 0.23 million of Open Interest in the August month futures contract, L&T witnessed an addition of 0.03 million of Open Interest in the August month contract and SBI witnessed an addition  of 0.30 million of Open Interest in the August month's future contract.