Nifty snaps six-day winning streak

After touching fresh all-time highs in the previous session, Nifty consolidated on Wednesday exhibiting a lackluster trading session on account of profit booking amid weak European cues. The market sentiment was hit adversely as indirect tax collections grew by 4.0 y-o-y percent to Rs 1.54 lakh crore during April-July period of current fiscal which is far less than 25 percent annual increase envisaged in the Budget for the full 2014-15 fiscal. Besides, Asian Development Bank's (ADB) statement that global failure to respond to climate changes could result in about 8.7 percent economic loss in India's Gross Domestic Product (GDP) by 2100 also added to the pessimistic sentiments. However, gains in Healthcare, information technology (IT) and Realty stocks have restrained the market to extend losses. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth net Rs 559.39 crore on August 19, 2014.

After a positive opening, nifty slipped into the red in early deals as investors turned cautious and booked profits. Thereafter, the nifty failed to show any kind of fervor due to lack of encouraging leads and finally ended the session above its crucial 7,850 mark with a cut of over two tenths of a percent.

The market currently is in a structural bull run and the positive trend will continue going forward. However, one could see some consolidation, correction, which in turn could pose as a buying opportunity. Besides, the subdued oil prices have also aided Indian economy as it helps contain inflation and contain current account deficit.

The top gainers from the F&O segment were Arvind, Sun Pharmaceuticals Industries and Ranbaxy Laboratories. On the other hand, the top losers were Oriental Bank of Commerce, Indian Overseas Bank and GMR Infrastructure. In the index option segment, maximum OI continues to be seen in the 8000-7900 calls and 7700-7800 puts indicating this is the trading range expectation. Meanwhile, India VIX - the gauge of underlying volatility in the market - has declined in today's session, which indicates that traders have slowdown buying options contracts. 

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 1.76% and reached 13.66. The 50-share CNX Nifty decreased by 22.20 points or 0.28% to settle at 7,875.30. Nifty August 2014 futures closed at 7890.70 on Wednesday at a premium of 15.40 points over spot closing of 7,875.30, while Nifty September 2014 futures ended at 7922.10 at a premium of 46.80 points over spot closing. Nifty August futures saw contraction of 0.15 million (mn) units, taking the total outstanding open interest (OI) to 15.06 mn units. The near month derivatives contract will expire on August 28, 2014.

From the most active contracts, HDFC Bank August 2014 futures traded at a premium of 4.85 points at 824.85 compared with spot closing of 820.00. The number of contracts traded were 13,215.

Reliance Industries August 2014 futures traded at a premium of 5.70 points at 1002.30 compared with spot closing of 996.60. The number of contracts traded were 22,046.

Tata Motors August 2014 futures traded at a premium of 2.95 points at 514.00 compared with spot closing of 511.05. The number of contracts traded were 11,657.

Tata Steel August 2014 futures traded at a premium of 2.90 points at 547.60 compared with spot closing of 544.70. The number of contracts traded were 15,220.

Aurobindo Pharma August 2014 futures traded at a premium of 1.30 points at 796.90 compared with spot closing of 795.60. The number of contracts traded were 12,593.Among Nifty calls, 7900 SP from the August month expiry was the most active call with an addition of 0.07 million open interests. Among Nifty puts, 7,800 SP from the August month expiry was the most active put with a contraction of 0.30 million open interests. The maximum OI outstanding for Calls was at 8000 SP (8.93 mn) and that for Puts was at 7,700 SP (7.74 mn).  The respective Support and Resistance levels of Nifty are: Resistance 7910.65 --- Pivot Point 7887.35 --- Support --- 7852.00.

The Nifty Put Call Ratio (PCR) finally stood at 1.34 for August month contract. The top five scrips with highest PCR on OI were M&M (1.70), Maruti Suzuki (1.65), Kotak Bank (1.53), Sun Pharma (1.46) and Ranbaxy (1.45). 

Among most active underlying, State Bank of India witnessed a contraction of 0.17 million of Open Interest in the August month futures contract, followed by Arvind witnessing an addition of 1.45 million of Open Interest in the August month contract; while Tata Steel witnessed a contraction of 0.02 million of Open Interest in the August month futures contract, Tata Motors witnessed a contraction 0.67 million of Open Interest in the August month contract and Reliance Industries witnessed an addition of 0.30 million of Open Interest in the August month's future contract.