Nifty snaps five day winning streak; ends tad below 8100 mark

Snapping five consecutive sessions’ winning streak, Nifty consolidated and ended the choppy day of trade with a marginal cut of over two tenths of a percent, tad below its 8100 mark. Today’s weakness was largely on the back of profit booking by investors as they found market in an over-bought zone following the recent record-setting spree. Besides, report of World Economic Forum (WEF), which ranked India among the worst-ranked countries with respect to taxation and inflation dampened the trading sentiments. As per the report, India ranked 133rd in terms of inflation, 130th for taxes and 131st for starting a business, while India has slipped to 71st position -- the lowest among BRICS countries, in global competitiveness list. However, some respite came from a report that the government is set to fast-track the decision on easing rules for foreign investments in the construction development sector. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 1288.57 crore on September 03, 2014.

After a flat opening, nifty slipped in early morning trades and further lost ground in the afternoon session as well, however late low level buying in last hour of trade, pushed the index above to shut shop just below the 8100 mark. Traders were seen piling up positions in Healthcare, FMCG and Consumer Durables, while selling was witnessed in Realty, Metal and Capital Goods sector.

After today’s consolidation, some traders believe that today’s subdued trade might as well be the start of a correction as many targets have been comfortably achieved and there might be profit booking. On the contrary, some traders also believe the correction to be a small pull back and are expecting more run up on the back of sustained recovery in the economy.

The top gainers from the F&O segment were UPL, Arvind and Tata Global Beverages. The top losers were Jaiprakash Associates, DLF and Unitech. In the index options segment, maximum OI continues to be seen in the 8200-8300 calls and 8000-7900 puts indicating the expected trading range. Meanwhile, India VIX - the gauge of underlying volatility in the market - has declined in today's session, which indicates that traders have slowed down buying options contracts.

The India Volatility Index (VIX), a gauge for market's short term expectation of volatility decreased by 2.35% and reached 13.07. The 50-share CNX Nifty decreased by 18.65 points or 0.23% to settle at 8,095.95. Nifty September 2014 futures closed at 8132.40 on Thursday at a premium of 36.45 points over spot closing of 8,095.95, while Nifty October 2014 futures ended at 8174.45 at a premium of 78.50 points over spot closing. Nifty September futures saw contraction of 0.98 million (mn) units, taking the total outstanding open interest (OI) to 15.90 mn units. The near month derivatives contract will expire on September 25, 2014.

From the most active contracts, Jaiprakash Associates September 2014 futures traded at a premium of 0.15 points at 37.90 compared with spot closing of 37.75. The number of contracts traded were 29,604.

Tata Global Beverages September 2014 futures traded at a discount of 0.30 points at 163.30 compared with spot closing of 163.60. The number of contracts traded were 13,406.

HDFC Bank September 2014 futures traded at a premium of 5.80 points at 858.45 compared with spot closing of 852.65. The number of contracts traded were 11,550.

DLF September 2014 futures traded at a premium of 0.20 points at 168.20 compared with spot closing of 168.00. The number of contracts traded were 25,076.

Reliance Industries September 2014 futures traded at a premium of 5.75 points at 1030.70 compared with spot closing of 1024.95. The number of contracts traded were 23,364.

Among Nifty calls, 8200 SP from the September month expiry was the most active call with an addition of 0.35 million open interests. Among Nifty puts, 8,000 SP from the September month expiry was the most active put with an addition of 0.39 million open interests. The maximum OI outstanding for Calls was at 8200 SP (5.25 mn) and that for Puts was at 8,000 SP (7.11 mn).  The respective Support and Resistance levels of Nifty are: Resistance 8120.20 --- Pivot Point 8090.55 --- Support --- 8066.30.

The Nifty Put Call Ratio (PCR) finally stood at 1.20 for September month contract. The top five scrips with highest PCR on OI were Sun TV (1.54), Apollo Hospital (1.40), Hero MotoCorp (1.22), M&M (1.10) and Colgate Palmolive (1.10). 

Among most active underlying, Jaiprakash Associates witnessed an addition of 14.17 million of Open Interest in the September month futures contract, followed by DLF witnessing an addition of 2.24 million of Open Interest in the September month contract; while Arvind witnessed an addition of 0.42 million of Open Interest in the September month futures contract, Tata Steel witnessed an addition 1.30 million of Open Interest in the September month contract and ICICI Bank witnessed a contraction of 0.37 million of Open Interest in the September month's future contract